cancel
Showing results for 
Search instead for 
Did you mean: 

Mortgage FICO much lower than FICO 8

Auto Loans for ANY Credit Situation. Immediate Response.
Advertiser disclosure
Highlighted
New Member

Re: Mortgage FICO much lower than FICO 8

For what its worth when I started mortgage shopping my mortgage scores were all 50+ points lower than Fico 8. All Fico 8's were in the mid 600's to low 700's and mortgage scores were mid 600's. Only negatives were late pays on student loans from a year ago, but my credit utilization was at 95%. After paying my cards down under 10% my Fico 8's jumped 80 plus points and mortgage scores jumped even more and ended up being higher than Fico 8's. So the mortgage score seems to weigh credit utilization quite high, at least for my profile.

Message 11 of 28
Highlighted
Moderator Emeritus

Re: Mortgage FICO much lower than FICO 8


@garagebandking wrote:

When I started the process in May/June, my Fico 8 scores were lower than my mortgage scores. I attributed this to the fact my student loans were close to 90k in balance and current.

 

The mortgage scores certainly seem to weigh installment loans more heavily.


Did you mean weight less based on what your own data suggests?  From extensive testing the mortgage scores (other than Experian which is a FICO 98 model) discount installment utilization.

 

From my own data, I got no movement when I went from ~80% installment utillization to <10% on EQ Beacon 5.0 or Transunion Classic 04 (two of the three mortgage scores); however I got a ~20 point increase on my FICO 8's.

 

Similarly when my mortgage reported, I lost those ~20 points on my FICO 8's, and didn't budget at all on the aforementioned two mortgage scores.

 

Your post also suggests similarly: it's a simple aggregate calculation - aggregate loan balances vs. aggregate original balances - if that's more than 10% and everything else is similar it's likely that your mortgage scores will trend higher as you suggest.  There seems to be a higher breakpoint too but we've never isolated it and anecdotal data is only so good unfortunately.




        
Message 12 of 28
Highlighted
Moderator Emeritus

Re: Mortgage FICO much lower than FICO 8


@outofdoors wrote:

For what its worth when I started mortgage shopping my mortgage scores were all 50+ points lower than Fico 8. All Fico 8's were in the mid 600's to low 700's and mortgage scores were mid 600's. Only negatives were late pays on student loans from a year ago, but my credit utilization was at 95%. After paying my cards down under 10% my Fico 8's jumped 80 plus points and mortgage scores jumped even more and ended up being higher than Fico 8's. So the mortgage score seems to weigh credit utilization quite high, at least for my profile.


 

Hrm, you hit 740-780+ on your mortgage trifecta with some pattern of lates from a year prior?  Student loan tradeline wasn't in dispute or similar?  Would be intested in knowing the explicit score changes if you still have that data available.  Interesting datapoint anyway!




        
Message 13 of 28
Highlighted
New Member

Re: Mortgage FICO much lower than FICO 8


@Revelate wrote:

@outofdoors wrote:

For what its worth when I started mortgage shopping my mortgage scores were all 50+ points lower than Fico 8. All Fico 8's were in the mid 600's to low 700's and mortgage scores were mid 600's. Only negatives were late pays on student loans from a year ago, but my credit utilization was at 95%. After paying my cards down under 10% my Fico 8's jumped 80 plus points and mortgage scores jumped even more and ended up being higher than Fico 8's. So the mortgage score seems to weigh credit utilization quite high, at least for my profile.


 

Hrm, you hit 740-780+ on your mortgage trifecta with some pattern of lates from a year prior?  Student loan tradeline wasn't in dispute or similar?  Would be intested in knowing the explicit score changes if you still have that data available.  Interesting datapoint anyway!


After looking at it I guess my origiinal numbers are off. I started in mid 600's and ended in the low 700's. The only data point I have now is that at 95% utilization my Experian mortgage score was at 630, Fico 8 at 671. (numbers produced from MyFico). Paying my CC down to 8% utilization brought me to a 722 mortgage and 719 Fico 8 with no other changes other than the utilization. Student loan tradeline was not in dispute. I had a string of 30,60,90 days late from last August but is now current. So no, I did not get my mortgage trifecta to 740-780 with recent lates, rather I got my middle mortgage score to 722 with recent lates.

Message 14 of 28
Highlighted
Regular Contributor

Re: Mortgage FICO much lower than FICO 8


@outofdoors wrote:

@Revelate wrote:

@outofdoors wrote:

For what its worth when I started mortgage shopping my mortgage scores were all 50+ points lower than Fico 8. All Fico 8's were in the mid 600's to low 700's and mortgage scores were mid 600's. Only negatives were late pays on student loans from a year ago, but my credit utilization was at 95%. After paying my cards down under 10% my Fico 8's jumped 80 plus points and mortgage scores jumped even more and ended up being higher than Fico 8's. So the mortgage score seems to weigh credit utilization quite high, at least for my profile.


 

Hrm, you hit 740-780+ on your mortgage trifecta with some pattern of lates from a year prior?  Student loan tradeline wasn't in dispute or similar?  Would be intested in knowing the explicit score changes if you still have that data available.  Interesting datapoint anyway!


After looking at it I guess my origiinal numbers are off. I started in mid 600's and ended in the low 700's. The only data point I have now is that at 95% utilization my Experian mortgage score was at 630, Fico 8 at 671. (numbers produced from MyFico). Paying my CC down to 8% utilization brought me to a 722 mortgage and 719 Fico 8 with no other changes other than the utilization. Student loan tradeline was not in dispute. I had a string of 30,60,90 days late from last August but is now current. So no, I did not get my mortgage trifecta to 740-780 with recent lates, rather I got my middle mortgage score to 722 with recent lates.


So outofdoors, what is your student loan balance due to original amount %? My student loans are still >100% balance to original amount.  

Message 15 of 28
Highlighted
New Member

Re: Mortgage FICO much lower than FICO 8


@tjmolly wrote:

@outofdoors wrote:

@Revelate wrote:

@outofdoors wrote:

For what its worth when I started mortgage shopping my mortgage scores were all 50+ points lower than Fico 8. All Fico 8's were in the mid 600's to low 700's and mortgage scores were mid 600's. Only negatives were late pays on student loans from a year ago, but my credit utilization was at 95%. After paying my cards down under 10% my Fico 8's jumped 80 plus points and mortgage scores jumped even more and ended up being higher than Fico 8's. So the mortgage score seems to weigh credit utilization quite high, at least for my profile.


 

Hrm, you hit 740-780+ on your mortgage trifecta with some pattern of lates from a year prior?  Student loan tradeline wasn't in dispute or similar?  Would be intested in knowing the explicit score changes if you still have that data available.  Interesting datapoint anyway!


After looking at it I guess my origiinal numbers are off. I started in mid 600's and ended in the low 700's. The only data point I have now is that at 95% utilization my Experian mortgage score was at 630, Fico 8 at 671. (numbers produced from MyFico). Paying my CC down to 8% utilization brought me to a 722 mortgage and 719 Fico 8 with no other changes other than the utilization. Student loan tradeline was not in dispute. I had a string of 30,60,90 days late from last August but is now current. So no, I did not get my mortgage trifecta to 740-780 with recent lates, rather I got my middle mortgage score to 722 with recent lates.


So outofdoors, what is your student loan balance due to original amount %? My student loans are still >100% balance to original amount.  


They vary significatly between my 7 or so tradelines. Some are paid and closed, some in the 50% range and others upwards of 90%.

Message 16 of 28
Highlighted
Regular Contributor

Re: Mortgage FICO much lower than FICO 8


@Revelate wrote:

@garagebandking wrote:

When I started the process in May/June, my Fico 8 scores were lower than my mortgage scores. I attributed this to the fact my student loans were close to 90k in balance and current.

 

The mortgage scores certainly seem to weigh installment loans more heavily.


Did you mean weight less based on what your own data suggests?  From extensive testing the mortgage scores (other than Experian which is a FICO 98 model) discount installment utilization.

 

From my own data, I got no movement when I went from ~80% installment utillization to <10% on EQ Beacon 5.0 or Transunion Classic 04 (two of the three mortgage scores); however I got a ~20 point increase on my FICO 8's.

 

Similarly when my mortgage reported, I lost those ~20 points on my FICO 8's, and didn't budget at all on the aforementioned two mortgage scores.

 

Your post also suggests similarly: it's a simple aggregate calculation - aggregate loan balances vs. aggregate original balances - if that's more than 10% and everything else is similar it's likely that your mortgage scores will trend higher as you suggest.  There seems to be a higher breakpoint too but we've never isolated it and anecdotal data is only so good unfortunately.


Given my profile at the time: a few judgments marked as open (they were satisfied), an auto-loan charge-off from 2012 that began updating monthly again late last year, and one collection account that was listed as open (but also satisfied) - I'm left to believe that the installment loan (student loan) payment history was weighted more heavily by the mortgage scoring system. Not so much the balance/utilization just the payment history. I'm not sure the student loans reflect in a way that you could calculate utilization. But I am almost certain that the 13+ years of positive payment history on the student loans helped my mortgage score.

 

The fact that all the judgments and the collection account disappeared and my mortgage score didn't change much also makes me think the payment history on the installment loans is weighted more heavily. But yes, it is clearly all an aggregate. It would, however, make sense, that a mortgage score would look at installment loans differently.

 

If my credit card (the judgments and collection) were weighted anywhere near as heavily as the installment loan then it would stand to reason the mortgage score would be much closer to my Fico 8 score...instead of being 25+ points higher at the time.

 

I may have missed it...what were your installment loans?

The mortgage posting could've dropped your score because that does reflect utilization? Because it was a new account?

Message 17 of 28
Highlighted
Moderator Emeritus

Re: Mortgage FICO much lower than FICO 8


@garagebandking wrote:

@Revelate wrote:

@garagebandking wrote:

When I started the process in May/June, my Fico 8 scores were lower than my mortgage scores. I attributed this to the fact my student loans were close to 90k in balance and current.

 

The mortgage scores certainly seem to weigh installment loans more heavily.


Did you mean weight less based on what your own data suggests?  From extensive testing the mortgage scores (other than Experian which is a FICO 98 model) discount installment utilization.

 

From my own data, I got no movement when I went from ~80% installment utillization to <10% on EQ Beacon 5.0 or Transunion Classic 04 (two of the three mortgage scores); however I got a ~20 point increase on my FICO 8's.

 

Similarly when my mortgage reported, I lost those ~20 points on my FICO 8's, and didn't budget at all on the aforementioned two mortgage scores.

 

Your post also suggests similarly: it's a simple aggregate calculation - aggregate loan balances vs. aggregate original balances - if that's more than 10% and everything else is similar it's likely that your mortgage scores will trend higher as you suggest.  There seems to be a higher breakpoint too but we've never isolated it and anecdotal data is only so good unfortunately.


Given my profile at the time: a few judgments marked as open (they were satisfied), an auto-loan charge-off from 2012 that began updating monthly again late last year, and one collection account that was listed as open (but also satisfied) - I'm left to believe that the installment loan (student loan) payment history was weighted more heavily by the mortgage scoring system. Not so much the balance/utilization just the payment history. I'm not sure the student loans reflect in a way that you could calculate utilization. But I am almost certain that the 13+ years of positive payment history on the student loans helped my mortgage score.

 

The fact that all the judgments and the collection account disappeared and my mortgage score didn't change much also makes me think the payment history on the installment loans is weighted more heavily. But yes, it is clearly all an aggregate. It would, however, make sense, that a mortgage score would look at installment loans differently.

 

If my credit card (the judgments and collection) were weighted anywhere near as heavily as the installment loan then it would stand to reason the mortgage score would be much closer to my Fico 8 score...instead of being 25+ points higher at the time.

 

I may have missed it...what were your installment loans?

The mortgage posting could've dropped your score because that does reflect utilization? Because it was a new account?


To clear something up: the FICO Mortgage Industry Option isn't used at all for any lender I'm aware of.  99.999% of the mortgages underwritten in the United States are on the same three FICO scores, and those aren't specific to mortgages: actually they're the general common/classic algorithm versions (no industry option like auto or bankcard or the seemingly ignored mortgage industry option).  No skewed weightings.

 

From what you write the skew was actually simpler: FICO 8 "ages" derogatories more quickly in the sense it looks at recent information and weights it commeasurely more than the older versions of which the mortgage trifecta are all older algorithms.  I doubt that it was factoring the lates more heavily on the installment loans when we're talking the classic version (it might, hard to say as that's not well understood between the algorithms); however, I'm not surprised that you didn't get much having gotten the collection and judgements whacked: until you get out of a dirty bucket your score is limited anyway... for example I got 2/3 tax liens removed and a collection removed and my mortgage score moved all of around 8 points in aggregate.  /yawn.

 

On the flipside I went through a really sloppy and stupid part of my life with an awkward credit card after the mortgage closed and after a job fell apart and wound up with a 30 day late on TU... my TU Classic 04 score which is used in mortgages apparently didn't move (checked later on a refinance application), whereas my TU FICO 8 score got clipped by 19 points and hasn't recovered any of those lost points in 10 months.

 

My installment loans were a couple of baby secured loans, and then the mortgage which apparently counts as a basic installment loan too.  This was all aggregate installment utilization though, what you suggest of the relative weight on installment loan lates vs. revolving tradeline lates is harder to tease out... though I would suggest in general a late is a late, that might not necessarily be the case.  




        
Message 18 of 28
Highlighted
Valued Contributor

Re: Mortgage FICO much lower than FICO 8

My TU fico8 is like 785 but the morgage score was 735... YIKES!

I think its because my paid car loan isnt on my TU because that CU didnt report to TU (and I called and asked .. "we dont report to TU"..

Hmph

All 3 780's
All Chp7, Judgements , CO's now legally clean from scores low 600's just using this forum
Chase Amzn 8.5k , Citi BB 5k, Citi Gdyr 5K, Amzn Store 12k, SallieMae 12k Amex BCE 36k , PenFed Promise 50k +15k PLOC, NFCU Plat 48k, NFCU Rewards 15k, CareCredit 25k
Message 19 of 28
Highlighted
Senior Contributor

Re: Mortgage FICO much lower than FICO 8

Mine are lower also.

 

ETA: 1 12 month 1k share secured loan (closed a year ago), 3 auto loans (2 closed, 1 at 95% utilization), clean report.

 

jkkjnhjklkjklkjk.jpg


Message 20 of 28
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.