topic Re: Why is mortgage score so much lower?? in Understanding FICO® Scoring

Why is mortgage score so much lower??

Sitori — Thu, 25 Feb 2021 07:55:04 GMT

Hi everyone

Ive been working on my scores for years. No matter how much my scores go up, the mortgage score never moves. Why is the mortgage score so much lower than Fico 8, or others? It's strange that no matter how much the others move, these particular "mortgage scores" dont. Im speaking about the fico 2, 4 and 5. These are the scores generally used for mortgage correct?

How can I boost these?

Re: Why is mortgage score so much lower??

Ficoproblems247 — Thu, 25 Feb 2021 13:55:18 GMT

A couple of things that your mortgage scores do not like are ratio of cards with a balance reporting, even if your utilization is in an acceptable range, and also new accounts/inqs. A good way to boost the older FICO scores (including 5, 4, and 2) is to practice AZEO, where you let all revolving accounts report at a $0 balance except for 1. The 1 you need to let report at less than 9%. The card you let report the balance should be a major bank card, and not one issued by Chase or Synchrony. Do not use a store card or a card issued by a CU. As far as new accounts, FICO 5, 4, and 2 are more sensitive to both inquiries and new accounts, so if you have either of these on your profile currently your FICO 8s may have already bounced back, but the older models take a bit longer. Hopefully some mortgage experts can chime in with more specific advice and questions about your individual profile, but those are just a couple of general things to throw out there. I wish you the best of luck throughout the process!

Re: Why is mortgage score so much lower??

TravelNut — Thu, 25 Feb 2021 14:07:12 GMT

@Ficoproblems247 wrote:
A couple of things that your mortgage scores do not like are ratio of cards with a balance reporting, even if your utilization is in an acceptable range, and also new accounts/inqs. A good way to boost the older FICO scores (including 5, 4, and 2) is to practice AZEO, where you let all revolving accounts report at a $0 balance except for 1. The 1 you need to let report at less than 9%. The card you let report the balance should be a major bank card, and not one issued by Chase or Synchrony. Do not use a store card or a card issued by a CU. As far as new accounts, FICO 5, 4, and 2 are more sensitive to both inquiries and new accounts, so if you have either of these on your profile currently your FICO 8s may have already bounced back, but the older models take a bit longer. Hopefully some mortgage experts can chime in with more specific advice and questions about your individual profile, but those are just a couple of general things to throw out there. I wish you the best of luck throughout the process!

Good info here!

Question: If you have Zero new accounts in the last 2 yrs like myself but add one or two new ones, how long will it take to recover those points lost due to new accounts added? Is it like 1 yr before those new inquires don't have as much impact or longer or shorter than 1 yr? This is in reference to the 5,4,2 scoring model

Re: Why is mortgage score so much lower??

Ficoproblems247 — Thu, 25 Feb 2021 14:33:38 GMT

@TravelNut wrote:
@Ficoproblems247 wrote:
A couple of things that your mortgage scores do not like are ratio of cards with a balance reporting, even if your utilization is in an acceptable range, and also new accounts/inqs. A good way to boost the older FICO scores (including 5, 4, and 2) is to practice AZEO, where you let all revolving accounts report at a $0 balance except for 1. The 1 you need to let report at less than 9%. The card you let report the balance should be a major bank card, and not one issued by Chase or Synchrony. Do not use a store card or a card issued by a CU. As far as new accounts, FICO 5, 4, and 2 are more sensitive to both inquiries and new accounts, so if you have either of these on your profile currently your FICO 8s may have already bounced back, but the older models take a bit longer. Hopefully some mortgage experts can chime in with more specific advice and questions about your individual profile, but those are just a couple of general things to throw out there. I wish you the best of luck throughout the process!
Good info here!
Question: If you have Zero new accounts in the last 2 yrs like myself but add one or two new ones, how long will it take to recover those points lost due to new accounts added? Is it like 1 yr before those new inquires don't have as much impact or longer or shorter than 1 yr? This is in reference to the 5,4,2 scoring model

Ok so here is a quick chart I just whipped up to use as an example, it's not the best thing in the world, but it will help show a bit of difference. The inquiries will affect you for 365 days. New accounts can really vary by profile so I don't know if I am educated enough to really tell you when that will start to make a difference, but AAoA always plays a role in your score. Newer, clean profiles suffer from a little bit of a new account penalty too when your youngest relvover is less than a year old. Ok, this chart has 3 recent dates, it will show when I just had an inq fall off of my EX report last week and then went from 2 cards reporting to AZEO and how my different EX scores were affected.

2/19/21: 2 scorable inquiries, 2 cards reporting a balance

2/21/21: 1 scorable inquiry, 2 cards reporting a balance

2/25/21: 1 scorable inquiry, 1 card reporting a balance (AZEO)

Experian FICO Scores
Score Model	2/19/21	2/20/21	2/25/21
Score 8	747	748	748
Score 2	732	742	746
Score 3	747	756	758
Auto 2	736	745	749
Auto 8	756	759	759
Bankcard 2	744	754	759
Bankcard 8	763	764	772

You can clearly see how the older models were affected more than score 8 by the inq dropping off. Also, a larger impact with AZEO too, with BC8 being the only newer scoring model affected by the change from 2 cards reporting to AZEO.

Sorry for the info overload, but since I had these profile changes just happen to me it was easy to quickly whip up a visual to help explain it a little better!

Re: Why is mortgage score so much lower??

TravelNut — Thu, 25 Feb 2021 15:46:44 GMT

@Ficoproblems247 wrote:
@TravelNut wrote:
@Ficoproblems247 wrote:
A couple of things that your mortgage scores do not like are ratio of cards with a balance reporting, even if your utilization is in an acceptable range, and also new accounts/inqs. A good way to boost the older FICO scores (including 5, 4, and 2) is to practice AZEO, where you let all revolving accounts report at a $0 balance except for 1. The 1 you need to let report at less than 9%. The card you let report the balance should be a major bank card, and not one issued by Chase or Synchrony. Do not use a store card or a card issued by a CU. As far as new accounts, FICO 5, 4, and 2 are more sensitive to both inquiries and new accounts, so if you have either of these on your profile currently your FICO 8s may have already bounced back, but the older models take a bit longer. Hopefully some mortgage experts can chime in with more specific advice and questions about your individual profile, but those are just a couple of general things to throw out there. I wish you the best of luck throughout the process!
Good info here!
Question: If you have Zero new accounts in the last 2 yrs like myself but add one or two new ones, how long will it take to recover those points lost due to new accounts added? Is it like 1 yr before those new inquires don't have as much impact or longer or shorter than 1 yr? This is in reference to the 5,4,2 scoring model
Ok so here is a quick chart I just whipped up to use as an example, it's not the best thing in the world, but it will help show a bit of difference. The inquiries will affect you for 365 days. New accounts can really vary by profile so I don't know if I am educated enough to really tell you when that will start to make a difference, but AAoA always plays a role in your score. Newer, clean profiles suffer from a little bit of a new account penalty too when your youngest relvover is less than a year old. Ok, this chart has 3 recent dates, it will show when I just had an inq fall off of my EX report last week and then went from 2 cards reporting to AZEO and how my different EX scores were affected.

2/19/21: 2 scorable inquiries, 2 cards reporting a balance
2/21/21: 1 scorable inquiry, 2 cards reporting a balance
2/25/21: 1 scorable inquiry, 1 card reporting a balance (AZEO)

Experian FICO Scores
Score Model
2/19/21
2/20/21
2/25/21
Score 8
747
748
748
Score 2
732
742
746
Score 3
747
756
758
Auto 2
736
745
749
Auto 8
756
759
759
Bankcard 2
744
754
759
Bankcard 8
763
764
772

You can clearly see how the older models were affected more than score 8 by the inq dropping off. Also, a larger impact with AZEO too, with BC8 being the only newer scoring model affected by the change from 2 cards reporting to AZEO.

Sorry for the info overload, but since I had these profile changes just happen to me it was easy to quickly whip up a visual to help explain it a little better!

Awesome info! Yeah you can clearly see that the Experian Mort Score was hit significantly higher! Thanks!

Re: Why is mortgage score so much lower??

SouthJamaica — Thu, 25 Feb 2021 20:03:01 GMT

@Sitori wrote:
Hi everyone

Ive been working on my scores for years. No matter how much my scores go up, the mortgage score never moves. Why is the mortgage score so much lower than Fico 8, or others? It's strange that no matter how much the others move, these particular "mortgage scores" dont. Im speaking about the fico 2, 4 and 5. These are the scores generally used for mortgage correct?

How can I boost these?

I had the same issue for a long time, my mortgage scores much much lower -- in the neighborhood of 60 points lower -- than my FICO 8's.

I'd come to the conclusion that the chief distinguishing factors between the two, at least among "clean" scorecards, are:

1. The mortgage scores are more seriously affected by "newness" factors -- i.e. inquiries, age of newest account, average age of accounts.

2. The mortgage scores are more interested in seeing a large number of accounts with zero balances than they are in seeing low percentage dollar utilization, while the FICO 8's are relatively forgiving of the number of accounts with balances, and are more likely to reward or punish the percentage dollar utilization factors.

During the past year this theory was supported by what happened to my profile. During this past year, my mortgage scores have moved up, and my FICO 8's have moved down, to a point that the mortgage scores are now substantially higher than my FICO 8's. On Experian, e.g., the spread is now +36. I feel certain the reason is that my utilization percentages have crept up to uncharacteristally high numbers, while the average age of accounts has been growing, the age of newest account hasn't reset in 9 months, and the numbers of accounts with and without balances have stayed the same.

Re: Why is mortgage score so much lower??

CH-7-Mission-Accomplished — Fri, 26 Feb 2021 01:06:17 GMT

@Sitori wrote:
Hi everyone

Ive been working on my scores for years. No matter how much my scores go up, the mortgage score never moves. Why is the mortgage score so much lower than Fico 8, or others? It's strange that no matter how much the others move, these particular "mortgage scores" dont. Im speaking about the fico 2, 4 and 5. These are the scores generally used for mortgage correct?

How can I boost these?

I feel your pain. Check out my scores below -- mortgage scores, FICO 8's and FICO 9's. You can see my FICO 9's are in the 800s with one just shy of a perfect 850. And my BK 7 is reporting on all three reports. I have no inquiries in the last two years, no new accounts in the last two years and only report one or two accounts with a reported balance of $5 during any month. These scores are stuck like glue in the mid 720s.

I have no derogs aside from the BK 7.

I have come to accept that until that BK 7 falls off at 10 years, I'm going to stay in this range for mortgage scores.

Wish I had better news but I have followed all advice and every other score, besides mortgage scores, have done remarkably well.

The advice is valid about not opening new accounts in the prior year, etc., but don't expect your mortgage scores to jump into the range of your FICO 8's or 9's.

Good luck!

Re: Why is mortgage score so much lower??

Anonymous — Fri, 26 Feb 2021 11:23:21 GMT

@CH-7-Mission-Accomplished wrote:
@Sitori wrote:
Hi everyone

Ive been working on my scores for years. No matter how much my scores go up, the mortgage score never moves. Why is the mortgage score so much lower than Fico 8, or others? It's strange that no matter how much the others move, these particular "mortgage scores" dont. Im speaking about the fico 2, 4 and 5. These are the scores generally used for mortgage correct?

How can I boost these?
I feel your pain. Check out my scores below -- mortgage scores, FICO 8's and FICO 9's. You can see my FICO 9's are in the 800s with one just shy of a perfect 850. And my BK 7 is reporting on all three reports. I have no inquiries in the last two years, no new accounts in the last two years and only report one or two accounts with a reported balance of $5 during any month. These scores are stuck like glue in the mid 720s.

I have no derogs aside from the BK 7.

I have come to accept that until that BK 7 falls off at 10 years, I'm going to stay in this range for mortgage scores.

Wish I had better news but I have followed all advice and every other score, besides mortgage scores, have done remarkably well.

The advice is valid about not opening new accounts in the prior year, etc., but don't expect your mortgage scores to jump into the range of your FICO 8's or 9's.

Good luck!

@CH-7-Mission-Accomplished800s with a BK on 9?

Re: Why is mortgage score so much lower??

Anonymous — Fri, 26 Feb 2021 11:24:14 GMT

@TravelNut wrote:
@Ficoproblems247 wrote:
A couple of things that your mortgage scores do not like are ratio of cards with a balance reporting, even if your utilization is in an acceptable range, and also new accounts/inqs. A good way to boost the older FICO scores (including 5, 4, and 2) is to practice AZEO, where you let all revolving accounts report at a $0 balance except for 1. The 1 you need to let report at less than 9%. The card you let report the balance should be a major bank card, and not one issued by Chase or Synchrony. Do not use a store card or a card issued by a CU. As far as new accounts, FICO 5, 4, and 2 are more sensitive to both inquiries and new accounts, so if you have either of these on your profile currently your FICO 8s may have already bounced back, but the older models take a bit longer. Hopefully some mortgage experts can chime in with more specific advice and questions about your individual profile, but those are just a couple of general things to throw out there. I wish you the best of luck throughout the process!
Good info here!
Question: If you have Zero new accounts in the last 2 yrs like myself but add one or two new ones, how long will it take to recover those points lost due to new accounts added? Is it like 1 yr before those new inquires don't have as much impact or longer or shorter than 1 yr? This is in reference to the 5,4,2 scoring model

@TravelNutLooking like 17 months for EX2.

Re: Why is mortgage score so much lower??

TravelNut — Fri, 26 Feb 2021 12:25:18 GMT

@Anonymous

WOW! That's longer than I expected to hear! So if you lost 10 points when the new inquiry hits would you incrementally gain back the points as the months go on and should get all 10 back in 17 months or those 10 points will be lost till the 17 month mark?

Re: Why is mortgage score so much lower??

Anonymous — Fri, 26 Feb 2021 13:41:07 GMT

No inquiries are 365 days.

New account threshold is probably 17 months.

Re: Why is mortgage score so much lower??

TravelNut — Fri, 26 Feb 2021 14:15:19 GMT

@Anonymous Oh gotcha!

Re: Why is mortgage score so much lower??

CH-7-Mission-Accomplished — Fri, 26 Feb 2021 16:46:15 GMT

@Anonymous wrote:
@CH-7-Mission-Accomplished wrote:
@Sitori wrote:
Hi everyone

Ive been working on my scores for years. No matter how much my scores go up, the mortgage score never moves. Why is the mortgage score so much lower than Fico 8, or others? It's strange that no matter how much the others move, these particular "mortgage scores" dont. Im speaking about the fico 2, 4 and 5. These are the scores generally used for mortgage correct?

How can I boost these?
I feel your pain. Check out my scores below -- mortgage scores, FICO 8's and FICO 9's. You can see my FICO 9's are in the 800s with one just shy of a perfect 850. And my BK 7 is reporting on all three reports. I have no inquiries in the last two years, no new accounts in the last two years and only report one or two accounts with a reported balance of $5 during any month. These scores are stuck like glue in the mid 720s.

I have no derogs aside from the BK 7.

I have come to accept that until that BK 7 falls off at 10 years, I'm going to stay in this range for mortgage scores.

Wish I had better news but I have followed all advice and every other score, besides mortgage scores, have done remarkably well.

The advice is valid about not opening new accounts in the prior year, etc., but don't expect your mortgage scores to jump into the range of your FICO 8's or 9's.

Good luck!
@CH-7-Mission-Accomplished800s with a BK on 9?

These all three FICO 9's have been above 800 for quite some time and the EQ 9 is at 843. I don't know how to post a an image of my scores but would be happy to. They are tall taken off of myFICO altough I also monitor CCT daily to follow EX 8 and get their monthly scores for other bureaus and some versions.

Re: Why is mortgage score so much lower??

Anonymous — Fri, 26 Feb 2021 21:20:12 GMT

@CH-7-Mission-Accomplished wrote:
@Anonymous wrote:
@CH-7-Mission-Accomplished wrote:
@Sitori wrote:
Hi everyone

Ive been working on my scores for years. No matter how much my scores go up, the mortgage score never moves. Why is the mortgage score so much lower than Fico 8, or others? It's strange that no matter how much the others move, these particular "mortgage scores" dont. Im speaking about the fico 2, 4 and 5. These are the scores generally used for mortgage correct?

How can I boost these?
I feel your pain. Check out my scores below -- mortgage scores, FICO 8's and FICO 9's. You can see my FICO 9's are in the 800s with one just shy of a perfect 850. And my BK 7 is reporting on all three reports. I have no inquiries in the last two years, no new accounts in the last two years and only report one or two accounts with a reported balance of $5 during any month. These scores are stuck like glue in the mid 720s.

I have no derogs aside from the BK 7.

I have come to accept that until that BK 7 falls off at 10 years, I'm going to stay in this range for mortgage scores.

Wish I had better news but I have followed all advice and every other score, besides mortgage scores, have done remarkably well.

The advice is valid about not opening new accounts in the prior year, etc., but don't expect your mortgage scores to jump into the range of your FICO 8's or 9's.

Good luck!
@CH-7-Mission-Accomplished800s with a BK on 9?
These all three FICO 9's have been above 800 for quite some time and the EQ 9 is at 843. I don't know how to post a an image of my scores but would be happy to. They are tall taken off of myFICO altough I also monitor CCT daily to follow EX 8 and get their monthly scores for other bureaus and some versions.

@CH-7-Mission-Accomplished I am beyond impressed. What's the date on the BK? Do you know how many years or months old it was when you saw the big shift in score? Which would've probably been when you went from recent/PR Scorecard to Mature/PR Scorecard.

if you would like to insert an image, simply click the camera icon above the text box in the reply, and it will give you an opportunity to choose the path and the image that you wish to upload.

Re: Why is mortgage score so much lower??

Anonymous — Sat, 27 Feb 2021 06:39:08 GMT

Not sure if its been mentioned yet, but the mortgage scores also run on a different scale than 8s and 9s, so even those scores at their best/peak by default will be lower than 8s and 9s at their [850] peak. It's also a lot "easier" to pin the needle on 8s and 9s than it is on the 3 mortgage scores.

Re: Why is mortgage score so much lower??

Sitori — Sat, 27 Feb 2021 07:30:30 GMT

thanks for the reply!

I do have some inq's I could probably get removed. I don't have many new accounts, only one store card. I am in the middle of paying off call my cards. I thought the rule was under 30% utilization but I will go with your 9%.

Re: Why is mortgage score so much lower??

Sitori — Sat, 27 Feb 2021 07:31:36 GMT

Thanks for this!!! I definitley have inq's! Im going to try to remove them. Any info on how to get them removed?

Re: Why is mortgage score so much lower??

Sitori — Sat, 27 Feb 2021 07:37:27 GMT

Im trying to break 700 this year across the board so mine arent the greatest but my EQ mortgage score is in the 500s!!! I just can't figure that out. Is there a specific CU that mortgage companies pull from to run credit? Or do they use all 3? Can we suggest they use the highest like we do with auto loans?! lol --maybe that's wishful thinking...

I don't plan on getting into anything for atleast a year but this year for sure is the credit building year. I just don't know how to get the mortgage scores to coinside with the rest. I definitely will be disputing the INQ's though, seeing as how I dont even recognize most of them. My oldest account is from 2011 I believe. My newest was a stupid store card from 6 months ago.

Re: Why is mortgage score so much lower??

Anonymous — Sat, 27 Feb 2021 09:10:59 GMT

@Sitori wrote:
Im trying to break 700 this year across the board so mine arent the greatest but my EQ mortgage score is in the 500s!!! I just can't figure that out. Is there a specific CU that mortgage companies pull from to run credit? Or do they use all 3? Can we suggest they use the highest like we do with auto loans?! lol --maybe that's wishful thinking...

I don't plan on getting into anything for atleast a year but this year for sure is the credit building year. I just don't know how to get the mortgage scores to coinside with the rest. I definitely will be disputing the INQ's though, seeing as how I dont even recognize most of them. My oldest account is from 2011 I believe. My newest was a stupid store card from 6 months ago.

@Sitori you want individual tradelines under 29.5% and you want aggregate revolving utilization under 9.5%. But when you get ready to maximize your mortgage score, you practice AZEO which involves only leaving a small balance on one bankcard that has a credit limit of less than $31,000.

mortgage companies pull from all 3 bureaus. The new store card hurt you. As stated, you really don't want any new accounts or inquiries for roughly 17 months, maybe more, to maximize and optimize your score.

if you have inquiries that you did not authorize and that are not legitimate them by all means, dispute them and get them removed.

Re: Why is mortgage score so much lower??

Anonymous — Wed, 31 Mar 2021 17:20:54 GMT

Great question re; fico scores 2, 4, & 5. I was wondering why mine were so much lower than my other scores also. And, like yours these scores never seem to budget! Thanks again for asking this question!