@Anonymous wrote:I am currently trying to buy my first home. This has been a struggle for me to understand the different scores out there. I was told by the mortgage lender I was dealing with to "check" my credit scores for free only for the person to say, "oh, that is your consumer score and we use a different score." I have gotten really frustrated lately because my fic score for equifax and experian are above 620 which is what I need to get a mortgage loan. Only to be told by the mortgage lender that my score is much lower than that. I was like wth?? I did have high credit utilization but have since paid them down and I am currently waiting for the credit card companies to update with the credit bureaus. Can someone please help me understand the score mortgage lenders use? BTW, I was told to open up 2 secured credit cards and possibly a 3rd along with a personal loan to help raise your credit score.
Welcome to the forums!
99.9XXX% where XXX is a pretty big set of digits of mortgages are written on a single set of scores:
1) Equifax Beacon 5.0 - you can buy this score as a consumer from Equifax directly with their Score Power product.
2) Transunion FICO Risk Score Classic 04 - can't really get
3) Experian FICO Risk Model v2 - can't get unless you live in PA as a member of a particular credit union
Mortgage lenders rarely are experts in credit scoring; some are admittedly good, but what I would suggest doing is post your credit report information here and let some people take a look at it such that they can offer advice on how to improve your score.
The advice to open up accounts only works if you have a thin file and are lacking accounts of various types: it's great advice for some consumers, but it very much depends on what you have in your report already and it sounds like from the fact you had high credit card utilization, that might not help you tremendously at least with the secured credit cards.
In any event the more information you're willing to share the better off we can help you. Basically what tradelines (accounts and types on the credit report) you have, what balances and limits on your credit cards, and any negative items you have your report would be a good starting point for the discussion.
@Anonymous wrote:
Thanks for the info. I have had a capital one secured card for about 7+ years. Recently applied for an unsecured card with capital one and was approved for 300. Just got an email saying my credit limit was raised to 1300 due to credit utilization and paying on time( don't know if this is good or bad). I also have a credit one credit card limit of 650, balance of 250. I just got a bank of america secured card and an openskyy secured card(the 2 cards I was told to get to help my score), both have low balances because I haven't used them. I filed bankruptcy back in 05 and it was dismissed in 07. Paid off an old credit card last year. Recently had to get another vehicle, so I have an auto loan listed now. I have a couple of loans that I always pay on time. Atlas 4 old accounts listed as none pay(all at least 3-5 years old).
You didn't need to get new cards in this case, your file was more than thick enough. That will likely be a short-term penalty. Credit limit increases (CLI's) are pretty much always a good thing when lender initiated.
From where you're at now your best bet is to manage your credit card balances, and address any derogatories since the BK if you have any. With what you posted I'm sort of surprised you needed help clearing an underwriting hurdle unless you've had issues since that BK dismissal, what did the lender say your scores were and where did he state they needed to be?
Anyway you have 5 cards now if I'm reading it right, general advice which typically works well for everyone: you'd want to pay down 4 of them such that they report $0, and only have call it $50 (some small non-zero balance on that one card) reported on that unsecured capital one card.
If you have any post BK negative marks, post them over in the Rebuilding forum and someone will likely be able to help you address them. Mortgage qualification isn't *that* hard especially if you've been clean since 2007, if you haven't then work on getting clean as that's what's hampering your scores presumably.
@Anonymous wrote:
Thanks for the info again. He stated they were in the upper 500's(can't remember exactly) and I needed to be at at least a 620. I haven't had anything negative since the BK except old utility bills and one doctor bill. My BK doesn't show except on one of my credit reports. I have an associates degree in accounting and finance, thinking it might be beneficial if I take a mortgage lending class. Lol
Grin, there's a lot of information but this forum is a tremendous resource. There's a couple people that frequent the mortgage forum who are legitimate experts in the field even compared to most mortgage lenders in my opinion. Do see about getting those utility and doctor bills taken care of, post those over in the Rebuilding forum sometimes they can be removed altogether and that's a supremely good thing when it happens.