FICO scores have become so unreliable

[Anonymous]

PS.  Funny that BBS and I (independently) came up with a car illustration.

Note that my llustration zeroes in on the AGE of the cars, which corresponds to the age of the models.  It makes sense that a Ford in 2018 and a Ford in in the 1960s should be very different (in ride, feel, features, etc.).  It also makes sense that Ford should try to make improvements and changes to the cars it makes as the years go by.  But if a person didn't realize that his neighbor's car was made a long time ago, he'd be baffled by how different it was.

It's important to distinguish in your own mind frustration about what the mortgage industry might be being forced to do by FM (i.e. drive a car from a long time ago -- the only option they will permit) but that's different from Ford making bad cars.  My guess is that many of your concerns would have been solved in the industry had been permitted to use FICO 8 Mortgage.

[Revelate]

I'm making a liberal assumption you're getting scores either from myFICO or Experian when you're talking auto vs mortgage etc.

Post the reason codes for your mortgage scores, FICO algorithms aren't rocket science and it's probably not a long walk as others have stated if you don't have any deliquencies or derogatories hanging out to improve your mortgage score... and the auto score is a red herring given it has a higher scoring range anyway TBH.

Classic 8 to any of the mortgage scores unlikely to be 105 points difference except as CGID suggested a 99 dollars collection on the wall being the obvious.

[Peter1142]

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@Anonymous wrote:

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@Peter1142 wrote:

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I would be a single car in your analogy, getting two different readings from two different instruments.

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That's fine to think of it as a single car, but the instruments are weighing data differently and measuring two different things.  Think of it like measuring torque vs horsepower.

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But they are not measuring two different things. They are both creditworthiness. A more apt analogy would be a single car's acceleration under two different conditions, say dry or wet surface.

I understand you are saying someone's creditworthiness can vary wildly between auto loans and mortgage loans, and we are just going to have to agree to disagree, I don't think this makes any sense at all. Maybe a minor difference sure, but not over 100 points and several credit tiers.

[dynamicvb]

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@Anonymous wrote:

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@Peter1142 wrote:

I do have a lot of accounts reporting with a tiny balance and this is perhaps why the model used for mortgages doesn't like me.

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Another easy explanation would be if you had a completely clean report except for a collection that was under $99.  The old models are very punitive about all derogs but the much later FICO 8 model was redesigned to ignore small collections, which you might get for a parking ticket or a library book you forgot to turn in.

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I was thinking of something very similar here. My EQ Fico 8 is my highest score, but the mortgage score for it is the lowest of all my scores, quite significantly. The difference, One small paid medical collection that is only on EQ.

[Anonymous]

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@dynamicvb wrote:

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I was thinking of something very similar here. My EQ Fico 8 is my highest score, but the mortgage score for it is the lowest of all my scores, quite significantly. The difference, One small paid medical collection that is only on EQ.

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By "small" do you mean less than $99?  If so, that explains it.  As I mentioned earlier FICO 8 ignores small collections.  The old models do not ignore them and treat them as serious derogs.

[Anonymous]

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@Peter1142 wrote:
No one is a top tier auto risk and a lukewarm mortgage risk.

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Why not? Being able to afford a $500 car payment on $30-40K loan is small potatoes compared to a Mortgage payment for $400-700K Loan. 

@Anonymous wrote:

Looking for $10,000 and I had the cash but, did not want to pay it all at once (the bank had really good rates) and liked my Beacon 5 Score. Well anyway, the bank said if most of their customers had my scores they would make more loans and then, turned me down (too much other available credit). Went to another local brick and motar bank I have used for seven years and the money was in my checking account within two minutes. Paid the loan off in 45 days.

Moral of the story ... "go figure" ...?

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This did pique my interest, as I thought paying off an installment loan so early can cause irregularities. Or at the very least cause a bank not to want to loan Money with such a low to non existant return. I'm guessing that you didn't pay any origination/ bank fees to open, and possibly not even any interest?

I recently payed a 36 month Loan back in about 12 months, and hoping that it wasn't too soon. They did end up extending me another Loan, so they must not have cared too much about all that lost interest. I just didn't want any potential lenders feel that they wouldn't make the full amount off of me, thus not lend to me.

[Peter1142]

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@Anonymous wrote:

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@Peter1142 wrote:
No one is a top tier auto risk and a lukewarm mortgage risk.

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Why not? Being able to afford a $500 car payment on $30-40K loan is small potatoes compared to a Mortgage payment for $400-700K Loan. 

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FICO scores do not evaluate what you can afford to pay. This is a whole separate and detailed analysis that is done by mortgage lenders (as well as card credit lenders, or any lender.). It is a single score that is supposed to evaluate your overall creditworthiness. Not your finances. In fact, I was applying for a relatively small loan that would reduce the mortgage payment I have not been late on once in over 5 years.

I do not have any collections, but I do have an authorized user account with lates on it, I think is ignored by current models. I thought this might be the issue, however my Transunion score which included it was much higher than the Experian score that did not.

[dynamicvb]

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@Anonymous wrote:

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@dynamicvb wrote:

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I was thinking of something very similar here. My EQ Fico 8 is my highest score, but the mortgage score for it is the lowest of all my scores, quite significantly. The difference, One small paid medical collection that is only on EQ.

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By "small" do you mean less than $99?  If so, that explains it.  As I mentioned earlier FICO 8 ignores small collections.  The old models do not ignore them and treat them as serious derogs.

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Yep, 45 bucks. Its the only negative mark left on any of my reports. For context, EQ mortgage is 690. EX 753 and TU 745. My auto score on EQ is 786

[Anonymous]

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@Peter1142 wrote:

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I understand you are saying someone's creditworthiness can vary wildly between auto loans and mortgage loans, and we are just going to have to agree to disagree, I don't think this makes any sense at all. Maybe a minor difference sure, but not over 100 points and several credit tiers.

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Alright, we'll move past the analogies and go back to facts.  One major one that you failed to comment on provided by CGID that almost completely gives you a "reason" for your 100 point variance is that the ceiling of the auto model is 900 and for the mortgage models is far less, as low as 818.  That's an 82 point variance right there between the "top" score of each, so a 100 point variance like you're seeing is many times not "several credit tiers" different and often isn't any tiers different.

[Peter1142]

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@Anonymous wrote:

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@Peter1142 wrote:

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I understand you are saying someone's creditworthiness can vary wildly between auto loans and mortgage loans, and we are just going to have to agree to disagree, I don't think this makes any sense at all. Maybe a minor difference sure, but not over 100 points and several credit tiers.

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Alright, we'll move past the analogies and go back to facts.  One major one that you failed to comment on provided by CGID that almost completely gives you a "reason" for your 100 point variance is that the ceiling of the auto model is 900 and for the mortgage models is far less, as low as 818.  That's an 82 point variance right there between the "top" score of each, so a 100 point variance like you're seeing is many times not "several credit tiers" different and often isn't any tiers different.

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I'm sorry but this is simply not true. You want facts? Ok. You can even verify this directly on MyFico. An 800+ auto score will always get you the best rates. A 695 is, in fact, 2 tiers below top rates. See for yourself:

https://www.myfico.com/loan-center/home-mortgage-rate-comparison/default.aspx

https://www.valuepenguin.com/auto-loans/average-auto-loan-interest-rates#credit-score

Auto loan scores run from 250 - 900, mortgage scores from 300-850. The auto loan scores are wider both on the top and the bottom. Regardless, despite the fact that an auto loan score range can go higher (and you ignore it is probably just as unlikely to reach 900 as a regular FICO is to reach 850), that doesn't mean it is a linear scale. The "bell curve" scores are still in a similar area.

I mean come on, suggesting an 800 Auto FICO is similar to a 700 FICO used for mortgages in terms of loan terms typically recieved is just plain silly. In fact, you typically don't need a super high score to get best rates on an auto loan -- I have gotten them easily around 710 in the past.