topic Re: How to increase mortgage score? in Understanding FICO® Scoring

How to increase mortgage score?

Anonymous — Wed, 11 May 2016 01:54:16 GMT

Mortgage score is low compared to regular fico score. What can I do to up the scrore?

Re: How to increase mortgage score?

Anonymous — Wed, 11 May 2016 15:05:26 GMT

General answer is to lower utilization, pay bills on time, and have negative items removed. What does your credit history look like?

Re: How to increase mortgage score?

Anonymous — Wed, 11 May 2016 21:01:57 GMT

@Anonymous wrote:
Mortgage score is low compared to regular fico score. What can I do to up the scrore?

Tell us a bit about your credit profile and you will get better responses as to how to improve your file. Whhat are your scores? What is holding it down? How old is your file?

Re: How to increase mortgage score?

Anonymous — Thu, 12 May 2016 02:25:22 GMT

I am going through the same thing right now. I have worked for 5 months to raise my credit score up from not having much credit besides student loans. I didn't know that the Experian FICO 8 score is not what mortgage lenders use. I had to lower my student loan payments when I did the IBR at 0 repayment I was told by first lender that he couldn't help me because I don't show enough years of payments. The second one said the amount and balances of my student loans was too high and to consolidate them, and then said with the IBR at 0 he couldn't help me. At this point I was frustrated and just decided to take a break until my student loan consolidation went through. Well in the meantime the rental I'm in sold which meant I had to try and get approved luckily my consolidation came through a couple days later. Third lender was quicken loans, I called for a morgage review and specifically asked the guy not to run my credit without giving him my social I figured I was safe, nope he did a hard hit on my credit. This brings me to the 4th one, I remembered that the company I work for had a partnership with Wells Fargo and offered an employee mortgage program so I called. The girl was very helpful and listened to my whole story. I told her my fico 8 score was 670 my debt was only 2 credit cards with only 300 limit on each plus 66,000 in student loans with a 0 payment through IBR, the house I was interested in was a foreclosure for 65,000, she emailed me all the info on what my amounts would be and I told her we would do preapproval on Tuesday. On Tuesday waiting for her to call I checked my credit score and it dropped 6 points I then realized that mortgage lenders use FICO 2 so I payed the 10 bucks to get it and it was only 614. It showed high utilization on my cards which I paid 1 to 0 and the other kept a 28 balance on now I'm waiting for them to report to credit agencies. I'm so frustrated and don't know what to do at this point. Any advice is so greatly appreciated. Thanks for listening to this long rant.

Re: How to increase mortgage score?

RonM21 — Thu, 12 May 2016 09:15:25 GMT

@Anonymous wrote:
General answer is to lower utilization, pay bills on time, and have negative items removed. What does your credit history look like?

I agree, this is most of where you're going to find improvement. There are other little things that can be done also, but this tends to have the most impact.

Re: How to increase mortgage score?

StartingOver10 — Sat, 14 May 2016 18:05:40 GMT

Bonniejean - head over to the mortgage subforum here at MyFICO to read about how student loans impact your mortgage approval. You got one of the "application takers" at Wells Fargo (rather than one of the trained LO's) that hasn't kept up with the new Federal requirements for underwriting people with student loans. I don't want you to operate with mis-information, so please read the stickies at the top of the mortgage section. http://ficoforums.myfico.com/t5/Mortgage-Loans/bd-p/loans

Re: How to increase mortgage score?

Anonymous — Sat, 14 May 2016 19:05:54 GMT

I'm aware of the new requirements she also checked for me but I'm not going fha I'm going traditional so I am not stuck with fha requirements and at most it will be 1% which she said I will still be ok for the price of the home

Re: How to increase mortgage score?

Anonymous — Sat, 14 May 2016 19:06:30 GMT

Thanks I will check them out I read some but not all

Re: How to increase mortgage score?

jamie123 — Mon, 16 May 2016 00:01:06 GMT

The FICO mortgage scores seem to be a much tougher nut to crack than the FICO 08 scores. I think they put more weight on AAoA and ratio of installment loan paid off versus starting balance than FICO 08 does.

Re: How to increase mortgage score?

Anonymous — Mon, 16 May 2016 21:24:42 GMT

@jamie123 wrote:
The FICO mortgage scores seem to be a much tougher nut to crack than the FICO 08 scores. I think they put more weight on AAoA and ratio of installment loan paid off versus starting balance than FICO 08 does.

Do you mind sharing why you believe this to be true? I would love add'l literature if you have it Thx!

Re: How to increase mortgage score?

jamie123 — Mon, 16 May 2016 23:36:53 GMT

@Anonymous wrote:
@jamie123 wrote:
The FICO mortgage scores seem to be a much tougher nut to crack than the FICO 08 scores. I think they put more weight on AAoA and ratio of installment loan paid off versus starting balance than FICO 08 does.
Do you mind sharing why you believe this to be true? I would love add'l literature if you have it Thx!

No specific literature but I do have my opinions from what I've read on MyFICO. (Literature tends to be very vague on credit subjects and is sometimes wrong or misleading.)

FICO 04 is like the strict teacher you had in school. FICO 04 has more strict rules than FICO 08 and is a lot harder to quickly raise your scores or manipulate them. I think they put more weight on oldest account. I think they give you more points for having a good mix of credit. Their AAoA takes longer to get max points. They don't like too many new accounts. They deduct more points for any baddies.

Its almost like you need a really well aged credit profile to get a high FICO 04 score so the only way to increase your FICO 04 score is to do what you need to do to raise your FICO 08 score but wait longer. I have noticed that most people don't have really good FICO 04 scores until their AAoA is over 4 years.

Well...That's my take on it anyway.

Re: How to increase mortgage score?

Anonymous — Tue, 17 May 2016 00:34:52 GMT

I agree with you me Experian fico 2 is 50 points lower than my fico 8 score I obkt gave 2 cc that are 4 months old and my student loans that are 5-6 years old my last late payment was 21/2 years ago and I have 150 collection for medical bill from 2010 so I agree with everything you said they are much stricter

Re: How to increase mortgage score?

Thomas_Thumb — Tue, 17 May 2016 00:50:10 GMT

@jamie123 wrote:
@Anonymous wrote:
@jamie123 wrote:
The FICO mortgage scores seem to be a much tougher nut to crack than the FICO 08 scores. I think they put more weight on AAoA and ratio of installment loan paid off versus starting balance than FICO 08 does.
Do you mind sharing why you believe this to be true? I would love add'l literature if you have it Thx!
No specific literature but I do have my opinions from what I've read on MyFICO. (Literature tends to be very vague on credit subjects and is sometimes wrong or misleading.)

FICO 04 is like the strict teacher you had in school. FICO 04 has more strict rules than FICO 08 and is a lot harder to quickly raise your scores or manipulate them. I think they put more weight on oldest account. I think they give you more points for having a good mix of credit. Their AAoA takes longer to get max points. They don't like too many new accounts. They deduct more points for any baddies.

Its almost like you need a really well aged credit profile to get a high FICO 04 score so the only way to increase your FICO 04 score is to do what you need to do to raise your FICO 08 score but wait longer. I have noticed that most people don't have really good FICO 04 scores until their AAoA is over 4 years.

Well...That's my take on it anyway.

Jamie123, I agree with most of what you said regarding Fico 04 ... Except Fico 04 actually does not require an open inatallment loan in the mix category. [Fico 98 and Fico 08 both do like to see an OPEN loan]. Also, Fico 04 punishes more heavily for too many open accounts (typically CCs) reporting a balance.

The lack of an OPEN installment loan not negatively impacting score on Fico 04 was communicated in Revelate posts a year ago.

During the past year I have seen confirming data presented that shows: An only installment loan gets paid off and closed -=> Fico 08 drops but Fico 04 does not.