@tjmolly wrote:
@iv wrote:
@tjmolly wrote:Say what? Lenders don't use the FICO mortgage verion? They use the classic FICO score?
They use three very specific FICO Classic scores (slightly different ones per CRA):
Equifax "FICO 5" (aka BEACON 5.0)
Transunion "FICO 4" (aka Risk Score Classic 04)
Experian "FICO 2" (aka Risk Model v2)
EQ5/TU4 are very similiar, and frequently referred to as "FICO04"-based scores.
EX2 is an older model, frequently referred to as a "FICO98"-based score.
These particular scores are used due to the GSEs (Fannie/Freddie/etc) requiring them on loans they back.
In practice, they are used for effectively all residental US mortgages, even if the lender holds the loan (instead of dumping it on the GSEs).
So you are saying they do use the FICO mortgage score we see on the 3b reports? Yes?
Correct.
There's a bunch of confusing verbiage; however, what is listed on a 3B report as "the scores most commonly used for mortgages" or something akin to that, are indeed what is used for statistically all of the mortgage underwriting. We've seen exactly one exception on this forum to my knowledge of a lender not using them.
@tjmolly wrote:Thanks for the insight, now all I need to do is figure out why the classic FICO is so much higher than the mortgage FICOs and what to do to fix it. Would a current credit card CO that is being paid monthly be a big factor? It was charged off 3 years ago and I'm paying an agreed amount monthly. It's not reported as collection, just charge-off and the balance is updated monthly.
Ugh, I absolutely abhor the way CO's are reported. That's a big scoring factor as it looks effectively brand new with every single update; however, I don't know that this would cause the disparity between the two... it might though if they are looking at different dates; however, I feel comfortable in saying that the mortgage trifecta scores likely see it as new, FICO 8 might've had a tweak there but it's nearly impossible to say and I'm skeptical of it.
This is not financial advice and money > FICO, but paying that and getting the line drawn in the sand would likely be a good thing from a credit perspective; are penalties and interest still accruing at whatever the nominal APR is on the card? In that case financial and FICO advice would be identical: pay that off ASAP; however, if it's not as a result of your agreement it's not as black and white.
