Why are mortgage scores 100 points lower?

[Anonymous]

We are trying to buy our first home, and I just got my mortgage scores over the 620 mark. However, we are having issues getting my husband’s in a lendable range and his are going to be the ones that matter. What sorts of things would cause a mortgage score to be over 100 points lower than FICO 8? His fico 8 scores are all around 620, but his mortgage scores are all around 500.

What sorts of items are weighted so differently between the models that would cause this?

[JVille]

We would need to know what is causing those low scores. How many late pays, collections, when was the last late pay, new Accts, Accts using all or majority of the CL. Too many inquiries. Even little to no credit can cause this.

The Mortgage Scores rate particular items that banks are concerned about. I believe their should only be one type of score rather than several.
It’s a bad system. But yes sadly more often than not Fico 8 scores are much higher and give people a false view of the Real Scores needed to buy a home.

Now let’s see what we can do to fix your hubby’s score

[Anonymous]

There’s quite a few late payments from late 2016/ early 2017 on his student loans. Several are 150 days. There were also 4 cc charge offs during that time. I got one charge off removed from the report. 2 are still showing a balance-one of those was been settled and should reflect a 0 balance soon. The other I’m working on and will also be paid if I ever get ahold of the CA (weird right?) He had several accounts in collections, 1 on EX paid in 2014 another reporting to EX/TU/EQ for 936. I settled that one today and will hopefully be able to goodwill to get it off (PFD were not successful after MANY attempts). There is one other collection on TU for $600 from a cable company. It’s past the statute of limitations but they won’t remove it unless PIF which is fine, it’s next on my to do list. One recent 30 day late with Citibank from January. That was literally just a stupid forgot to pay it issue so now I’ve got all his cards on auto pay. I’ve sent several GW but they aren’t working with us.

-Citibank card was opened one year ago, secured, $200 limit, 1 30 day in Jan 19
-NFCU, $500 limit, opened in February this year, no lates
-AU on a chase card with 16,800 limit (carries $2000 balance), 9 years, no lates
-AU on my NFCU secured card $500 limit opened 1 year ago, no lates
-AU on my cap 1 $300 limit card opened in January, no lates
-Fingerhut, $400 limit, 4 years old, no lates
-2 open auto loans currently in good standing but some 30 day lates from 2016/17
-2 closed by us credit card both have $9000 balances remaining, 30 day lates from 2016/17 (killing his utilization).
-Adding as AU to 5000 card to help util, 5 years of history
-lots of older closed loans PIF with no lates

We pay all cards in full each month, they all report 0 balances except the chase card which is my grandmas and she doesn’t understand that she has to pay it before the reporting date so it always reports a balance between 2000-3000.

[pgtackle2003]

The recent 30-day late from January is likely hurting this score the most since it's recent. Most lenders want to see at least 12 months of no lates on your CR.

The other items you listed for collections accounts and charge-offs are also causing this score drpop. especially the ones showing a balance. It seems Mortgage scores in particular are sensitive to accounts with balances. The 9k closed CC will likely need to be sorted before his mortgage scores will raise.

To give you an idea I have 2 paid charge-offs (showing 0$ balance) and 1 old closed SL (that was rehabbed and shows 120 dat late payments) and 1 paid collection. Those are all roughly 4 years old and my CC Util is around 1% but my Mortgage scores are around 670-680. So you can still get a decent mortgage score with those baddies but they must be paid first to 0$ balance

[Anonymous]

My hubbys mortgage scores are actually higher then his fico 8 scores.
Im surprised you guys can get approved w so many negative things on his credit report honestly.

[Anonymous]

I met with 3 different lenders. Each was confident that once our scores got to 620 that we’d be able to get a loan. Our income and DTI is all good, so it just came down to our scores.

[Anonymous]

So it sounds like I’m on the right track. Each of his collections will report as paid next month as will his last CO with a remaining balance. The interesting thing about the 9000 balances is that the exact same cards are reporting on my credit but not having the same impact. Our profiles are VERY similar except I don’t have any late payments in the last year.
With those 2 high balance closed cards, would it make more sense to take our down payment and apply it to those? Then get some sort of down payment assistance (which our lender said we will qualify for at 620).

[Anonymous]

Believe it or not, my score 2 with EX is 69 points higher. It currently sits at a 671.

[JVille]

The January 2019 late pay is the final straw here. You need to clean up as much as possible and then you need a FULL Year with NO late pays.

I will also remind you that the lender will go Line by Line thru your Bank Stmts every page and with your credit history even Bank Overdrafts will be enough to cause a problem. Many banks even have a section of their stmts for Year To Date Bank Fees. This is super important to monitor this.
I recently made my sister get a new checking acct about 4 months before making application because her bank (Chase Or Wells Fargo?) was showing multiple Overdrafts a month. In her case, with her past history it would have blown up her file once the UW saw it.

Good luck you are in the right path!

[Anonymous]

You guys are very lucky then!! Each time we bought a house they were very
Picky on everything lol onetime the lo even came to my job to actually verify it! But i hope you guys the best! We’re actually getting preapproved this week (just got hubbys credit scores all over 700) & excited to actually look at some houses this coming weekend! Are you guys looking already? Preapproved? Im nervous but scared too.