Different scoring method for mortgage??

[Anonymous]

Hi, My fiance and I are trying to purchase our first home and we have been working with a mortgage servicer/lender for the past 3 to 4 weeks. Needless to say we've been strung along, only to be told now that my score is still below 580 despite a re-score. Now the deal is that I don't have great credit, I filed BK 4 years ago, I have since had a few lates and 1 collection that I didn't know about until recently. I took care of the collection and all of my accounts are up to date. My experian score is 639 and my equifax score is 553. It was my understanding they use the middle score, which should be right around 580-590, right? However, my mortgage servicer just sent me a message saying he contacted the credit agency they use and they said they use a completely different system of scoring specifically for mortgages which causes the score to be lower. Is this true that agency's do this? I thought everyone used the major credit reporting agency's. Now mind you also that the scores above do not include the update to the collection account, it is still showing unpaid on my credit, but supposedly this credit agency did a re-score with my paid in full letter from the collection agency. Any info is greatly appreciated, this is becoming quite a frustrating process for us, especially since my fiance has great credit.

[haulingthescoreup]

Hi, Jstar, welcome to the forums, and sorry to hear about your bump in the road! As a rule, mortgage lenders use the classic versions of all three FICO scores, which are the ones that you find here. There are specialized scores for auto loans and bank cards, but they should be using the ones that you purchased.

myFICO sells the Beacon 5.0 (EQ), Empirica 98 (TU), and Fair Isaac Risk Model Version 2 (EX) scores. There's a good chance that your lender is using Empirica 04, the more recent TU score, but it's generally not all that different from the 98 version. (myFICO is transitioning to the newer version, now that 50% of US lenders have switched to it.)

You listed your EX and EQ scores, but not your TU score. They don't average two scores; they look at all three scores and pick the one in the middle.

Ask your lender to find out the exact names of the scores that were pulled.

Paying a collection makes other lenders happy, but it doesn't help your scores at all. I wish you'd found us sooner, as we would have advised doing a PFD --pay for delete, which means that you get a deal in writing with the collector that if you pay, they will cease reporting the collection forever to the three main credit bureaus.

At any rate, see if you can find out the precise name of the scores that were pulled and post back here. We might be able to give you some help from that point on.

Message Edited by haulingthescoreup on 08-26-2008 03:43 PM

[Anonymous]

thanks so much for the quick response....

so this is what the mortgage servicer just sent me:


Experian: 501 Rescore: 556
Trans U: 610 Rescore: 569
EquiFx: 520 Rescore: 550

So how is this so much different from what I am viewing online through Experian and Equifax?? My Experian score never posted at 501, it was at like 570 when I first contact this guy and then jumped to 589 right before he said he was running my credit. And my Trans U is even higher? and how did it drop to 569 with the rescore? This is crazy because when I view all 3 credit reports together in terms of what info they have, they all basically have the same info.

Message Edited by Jstar6 on 08-26-2008 04:53 PM

[haulingthescoreup]

That is very odd. I suppose it's possible that they're using a FAKO set of scores, but that would be very unusual for a mortgage lender.

If you can find out the precise name of each score (Equifax _______ , TransUnion ______ , etc., that might get us further in understanding.

[Anonymous]

I'm glad I'm not crazy for finding that very odd. It is unusual for the score to be that far off right?

This is the e-mail I got from the mortgage servicer...

The difference is that when you pull consumer scores the scores are higher.
When you pull scores used for mortgage qualifying the scoring models are
much, much
tighter.

So, if you apply for a $500 line for Wal-mart...the score will be much more
lenient
than a score for a $250,000 home. : )

Regards,
XXX XXXXXX
"Your Real Estate Investment Advisor For Life"
BWC Mortgage Services



-----Original Message-----
From: UDoubleDown11@comcast.net [mailto:UDoubleDown11@comcast.net]
Sent: Tuesday, August 26, 2008 4:55 PM
To: Dan Samera
Subject: RE: Loan

Wow, so I still don't understand why I am seeing such a different number
online directly from Experian and Equifax. I mean when we started all of
this Experian was reporting my score just around 570 and right before you
said you ran my cred it was at like 589. Now it is reporting it at 639!

Needless to say he's not very helpful at all... and prior to this e-mail I got this form him...

Hi Jami,

As I mentioned, the lender was willing to approve your loan

HOWEVER, as I suspected, we would not be able to move

forward because in order for the underwriter to rescore using

alternative credit on a client with established credit they would

need to start with 580 points.

Needless to say, this was a dead end discussion. Also, with time

running out the Nehemiah program is still up in the air at this point.

If in September, Congress decides to keep the DP assistance in place

then we maybe able to re look at your credit and see if it has improved

enough to move forward.



Don’t give up yet, time as I mentioned, is what we need to improve

your score. Let’s keep working and don’t despair…you can buy a home

soon!

So how are they willing to approve us but can't move forward?

[southernficoaddict]

---

Jstar6 wrote:
My experian score is 639 and my equifax score is 553.

Where are you getting your scores from?  Are you pulling them from Myfico?

[Anonymous]

directly from Experian and Equifax...

[haulingthescoreup]

---

@Anonymous wrote:
directly from Experian and Equifax...

---

That's the problem. EQ sells you your EQ FICO, but EX sells you their FAKO Experian Plus score.

[Anonymous]

I don't get why there are all of these different scores, it still amazes me the difference in the scores.

[haulingthescoreup]

The non-FICO FAKO scores are a handy invention by the credit bureaus and credit monitoring services. The kind-hearted might say that they are an attempt to provide a more affordable means of tracking credit. The cynical say that they're a great way for these folks to make some nice extra money.

You can get all 3 FICO's here.
You can also get your EQ FICO directly from Equifax. (Don't buy all three, though.)
You can get your TU FICO from www.transunioncs.com (note the cs)

Simpler to get them all here. First google fico discount coupon code to find at least 15% off. You might have to do some trial and error. We don't print them here except when FICO itself is offering them on the home page.