please help explain what a mortgage lender wrote about my scores

[GettingUnStuck]

I am thinking of possibly buying a manufactured home in Silicon Valley using FHA and a CAL FHA to help with the downpayment. I have decent income for this area, but nowhere near the level at which I could buy a condo because condos apparently do not qualify for FHA as a matter of rule with few exceptions.

I am trying to decode what the lender who pre-approved me wrote about my scores. It sounds from what he wrote that I have little influence in the short term to improve the scores at all. And yet he pulled the report for pre-approval when I had high utilization and now I have lower CU. It also sounds from what he wrote that I have no way to gauge what he sees with the model he uses - that consumer tools such as the 28 FICO scores provided by Credit.com (I got a free trial) are not informative. Is it the case or not?

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"Your three scores are as follows: 636 631 651. Of those, we use the middle for the transaction which is 636. There are various credit reporting formats and a mortgage inquiry uses the most comprehensive of all and it captures 100% of your credit history. Very different than something like an auto or personal loan which uses more recent data. This will also be different from credit monitoring apps as there is simply no way for the credit monitoring systems to have 100% accurate historical data. It’s more of an estimation at any given moment."

[4sallypat]

It is normal to take the mortgage FICO score in the middle.

Your mortgage broker is using a scoring model that works for them - realize that different brokers and lenders have different criteria for a loan.

Your scores are good for FHA loan.

My mortgage broker is very good - we are in the middle of counter offers on a house and our score is in between the top tier and below.

To get us to the top tier, my broker is having us pay off a card and reduce utilization.

He is so good that when escrow opens, he will do a rapid re-score before funding to get us into a lower APR (higher credit tier)....

It pays to shop around and find a broker or lender willing to help you out.

Have you tried the SP lender: Better.com ?

They will give the best rates as they are an online lender and they don't hit your credit score until an offer is accepted.

[VALoanMaster]

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@GettingUnStuck wrote:

I am thinking of possibly buying a manufactured home in Silicon Valley using FHA and a CAL FHA to help with the downpayment. I have decent income for this area, but nowhere near the level at which I could buy a condo because condos apparently do not qualify for FHA as a matter of rule with few exceptions.

I am trying to decode what the lender who pre-approved me wrote about my scores. It sounds from what he wrote that I have little influence in the short term to improve the scores at all. And yet he pulled the report for pre-approval when I had high utilization and now I have lower CU. It also sounds from what he wrote that I have no way to gauge what he sees with the model he uses - that consumer tools such as the 28 FICO scores provided by Credit.com (I got a free trial) are not informative. Is it the case or not?

***

"Your three scores are as follows: 636 631 651. Of those, we use the middle for the transaction which is 636. There are various credit reporting formats and a mortgage inquiry uses the most comprehensive of all and it captures 100% of your credit history. Very different than something like an auto or personal loan which uses more recent data. This will also be different from credit monitoring apps as there is simply no way for the credit monitoring systems to have 100% accurate historical data. It’s more of an estimation at any given moment."

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 Your lender did not do a good job of explaining things.

When you apply for a mortgage the credit bureaus use a specific scoring algorithm.

Equifax uses FICO classic V5.

TransUnion uses FICO Classic 4.

Experian uses FAIR Isaac V2.

The lender will use the middle of the 3 scores.

The consumer facing credit monitoring sites like Credit.com are great for showing you exactly what is reporting on your credit and giving you a ball park idea of what your scores are but they typically use the FICO 8 algorithm.

On some site like My Fico, you can pay for a mortgage report to see what scores your lender sees.

As a lender, I run credit simulators to see if there is an opportunity to raise your scores. If there is a way, I send a copy of the simulator with instructions on what we need to do a rapid re-score.

[BluIvy]

Thank you for sharing! Your post was incredibly helpful!