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baffling reason codes in the mortgage models

Valued Contributor

Re: baffling reason codes in the mortgage models


CreditGuyInDixie wrote:


Many thanks, TT.  When I next pull my mortgage scores (for the pre-approval, likely in July) I will make sure exactly three accounts show a balance: two installment and one CC.   I could make it two -- one installment and one revolving -- but then I would have to pay off one of my two installment loans, both with a very low installment utilization.  And I just don't feel like doing that, just for the sake of science.  If your guess is right (that the trigger is having four or more accounts reporting a balance) then I should get some relief as well as the message going away.

 

Even now, the ratio for the accounts is very low: 4 / 14 = 28.6% of my open accounts are showing a balance.  (And it's 17% of revolving accounts.)

 

Do you have any guesses regarding the meaning of the reason code as touches its claim about my CC utilization?  Do you think it is the fact that one card shows an 18% individual utilization?  Or do you guess it is just random "pull a code out of the hat" nonsense?


I get that statement from time to time on Fico 04 and Fico 98. It is a mystery to me as, like you, my revolving balance in aggregate is always quite low. I thought it might relate to my AMEX charge card but, a couple times the AMEX reported a zero balance. In fact, on a 3/2015 report my aggregate utilization was 0.5% with 3 cards reporting balances. The individual card utilizations were: 3%, 2% and 1%. 

 

It was listed 4th and was clearly bogus. The 1st two reason statements generally have some merit. The 3rd and 4th, if listed, are best ignored as they likely have little or no merit relative to score.

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950 (4/2017)
Message 11 of 17
Moderator

Re: baffling reason codes in the mortgage models


Thomas_Thumb wrote:

CreditGuyInDixie wrote:


Many thanks, TT.  When I next pull my mortgage scores (for the pre-approval, likely in July) I will make sure exactly three accounts show a balance: two installment and one CC.   I could make it two -- one installment and one revolving -- but then I would have to pay off one of my two installment loans, both with a very low installment utilization.  And I just don't feel like doing that, just for the sake of science.  If your guess is right (that the trigger is having four or more accounts reporting a balance) then I should get some relief as well as the message going away.

 

Even now, the ratio for the accounts is very low: 4 / 14 = 28.6% of my open accounts are showing a balance.  (And it's 17% of revolving accounts.)

 

Do you have any guesses regarding the meaning of the reason code as touches its claim about my CC utilization?  Do you think it is the fact that one card shows an 18% individual utilization?  Or do you guess it is just random "pull a code out of the hat" nonsense?


I get that statement from time to time on Fico 04 and Fico 98. It is a mystery to me as, like you, my revolving balance in aggregate is always quite low. I thought it might relate to my AMEX charge card but, a couple times the AMEX reported a zero balance. In fact, on a 3/2015 report my aggregate utilization was 0.5% with 3 cards reporting balances. The individual card utilizations were: 3%, 2% and 1%. 

 

It was listed 4th and was clearly bogus. The 1st two reason statements generally have some merit. The 3rd and 4th, if listed, are best ignored as they likely have little or no merit relative to score.


Hrm while I sort of agree, my installment utilization one was #3 on my FICO 8 models IIRC when I paid down to the pretty ratio and that was a substantial shift (near 20 points which I consider my personal benchmark for being relevant).

 

Granted the big scorekillers were #1 and #2 but at least on dirty files the additional reason codes might be meaningful.  Clean files and well built files I think they're mostly spurious, oh noes you went from 850 to 836, quelle horreur!

 

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 771, TU 4 758, EX 2 758, EQ 8 795, TU 8 762, EX 8 786 (7/28/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


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Message 12 of 17
Valued Contributor

Re: baffling reason codes in the mortgage models


Revelate wrote:
Clean files and well built files I think they're mostly spurious, oh noes you went from 850 to 836, quelle horreur

This reminds me of Apocalypse Now - "The horror - The horror"

 

Horror.jpg

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950 (4/2017)
Message 13 of 17
New Visitor

Re: baffling reason codes in the mortgage models

Here's my favorite, my mortgage company sold my mortgage yet again, and I got dinged 10-15 points on my scores because of it. They actually decreased because my loan DECREASED from 222K to 0???  Really, does the the sale of my mortgage make me an outlier in model through no action of my own?

Message 14 of 17
Senior Contributor

Re: baffling reason codes in the mortgage models

From a scoring perspective, especially if your mortgage balance was substantially paid down (which by FICO terms is about 75% or less utilization) it's unfortunate since you as the customer have absolutely no control over this.  You also get a "new account" that you didn't want.  I guess the on a positive note you don't take in inquiry, but that's pretty minor in the grand scheme of things related to this topic.

Message 15 of 17
Community Leader
Senior Contributor

Re: baffling reason codes in the mortgage models

Has the new mortgage tradeline appeared yet?  If not, the score change is a temporary blip.  FICO just thinks that you don't have an open loan anymore.

 

The real thing to watch is how the new mortgage TL reads when it appears.  Let's assume that your mortgage was originally for 240k, that you owed 225k on it last month when it changed hands, and that the loan was originally taken out on July 2005.

 

What you want to make sure happens is that the "new" mortgage still has the same date opened (July 2005) rather than March 2017, and that the original amount of the loan reads 240k (rather than 225k).  After all, this is a single loan that you have been steadily paying on for X years.  If a CC of yours is sold to another bank (happened to me twice) the date opened should (and did) travel with it, and the principle should IMO be the same for a loan.

 

That doesn't always happen.  For example, when my student loan was sold to another bank, they closed it and had a date opened of the same month/year as the transfer.  Since it was my oldest account that could have seriously hurt me when the closed line fell off, so I worked with the original bank and the new loan servicer and the CRAs to get the loans reporting with the original date opened and original amount owed.

 

It took a lot of phone calls but I eventually got it straightened out to my satisfaction.  If I were you I would watch how this loan sale affects you as well.

Message 16 of 17
Highlighted
Valued Contributor

Re: baffling reason codes in the mortgage models


Waterboy122 wrote:

Here's my favorite, my mortgage company sold my mortgage yet again, and I got dinged 10-15 points on my scores because of it. They actually decreased because my loan DECREASED from 222K to 0???  Really, does the the sale of my mortgage make me an outlier in model through no action of my own?


Mortgages are sold and purchased routinely. Your discontinuity should be very short term temporary. It should report at the same original loan amount, balance and origination date with the new mortgage company. Once that happens, your score should return to pre-sale status assuming no other changes.

 

The temporary score drop is either due to the mortgage being your only open installment loan closing => score drop on Fico 8 if no open loans; or you have a second, open, non mortgage installment loan that is at a high balance to loan ratio. In either case you sold mortgage will trump the current state when it shows up under new ownership. Make sure to check origination date to confirm it has not changed.

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950 (4/2017)
Message 17 of 17