Mortgage Fico Scoring help please

[pat0812]

I'm about to apply for a mortgage next week

Until last month I had an UTI of 32%

I got it down to about 10% and of course my FICO 8 jumped to 758 for experian, but from the reading FICO 8 is not the one to watch, but those

The FICO scores used for mortgages

• Equifax Beacon® 5.0

• Experian®/Fair Isaac Risk Model V2SM

• TransUnion FICO® Risk Score, Classic 04

Can somebody tell me what is different in those scores in the formulas?

Will those FICO scores remember my high UTI (32%) or will it only consider the current UTI only ?

How close to FICO 8 Score could I get too on those 3 variations ?

My Credit Report looks like that

Oldest Account: 4 years and 6 months

Average Age: 2 Years and 10 months

No late payments

No collections

2 Inquiries in last year

10% UTI in average over 9 credit card accounts. Balances on 3 accounts, and 6 accounts $0 balance ($95,500 credit limits)

1 Personal Loan ($550 balance left out of $3000 initially)

2 Car loans paid off

1 Car loan balance of $37,000 out of $50,000)

Do I have a chance of still getting thos mortgages FICO over 740 if my FICO 8 is 758  ?

[Anonymous]

My comments below in blue.

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@pat0812 wrote:

I'm about to apply for a mortgage next week

Will this be a pre-approval?  (A few months before you close?)  Or is this the final application and will immediately go to the underwriters?

If pre-approval then it is not essential to ge everything perfect yet.  If the final, then you may just have to hope for the best.  Getting all your balances reporting properly in 6 days may be very difficult. 

Until last month I had an UTI of 32%

I got it down to about 10% and of course my FICO 8 jumped to 758 for experian, but from the reading FICO 8 is not the one to watch, but those

That's right, FICO 8 will not be used by your lender, but rather the FICO mortgage scores.

The FICO scores used for mortgages

• Equifax Beacon® 5.0

• Experian®/Fair Isaac Risk Model V2SM

• TransUnion FICO® Risk Score, Classic 04

Can somebody tell me what is different in those scores in the formulas?

That won't help you.  That discussion is long and involved and you lack the background to make sense out of it.  Instead, you need actionable steps to take to raise your mortgage scores.  You give us us some helpful info below, but we need your timeframe (the questions I ask above).

Will those FICO scores remember my high UTI (32%) or will it only consider the current UTI only ?

It will consider whatever your credit reports currently say.  That may be different from last month and will also likely be different from your current balances as they read on each credit card, since today's balance have not yet been reported to the credit bureaus.  You need tools for pulling your credit reports frequently during the last few weeks.  We can suggest some of these to you.

How close to FICO 8 Score could I get too on those 3 variations ?

My Credit Report looks like that

Oldest Account: 4 years and 6 months

Average Age: 2 Years and 10 months

No late payments

No collections

2 Inquiries in last year

You mention that you have no lates and no collections.  Does that mean you also have no derogs of any kind?  No judgments, chargeoffs, liens, bankruptcies, etc?

10% UTI in average over 9 credit card accounts. Balances on 3 accounts, and 6 accounts $0 balance ($95,500 credit limits)

1 Personal Loan ($550 balance left out of $3000 initially)

2 Car loans paid off

1 Car loan balance of $37,000 out of $50,000)

Do I have a chance of still getting thos mortgages FICO over 740 if my FICO 8 is 758  ?

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You have a very good chance... depending on when your final underwriting will begin.

Can you pay off one more card -- pay it down to $0?  You need your utilization at < 8.99%  10% is too high for optimum scoring.  And you also need as many cards showing a $0 balance is possible.  7 cards with a $0 balance is quite possibly better than 6 -- it certainly can't hurt.  The FICO mortgage scoring models are more sensitive to the number of cards showing a balance than is FICO 8.

The biggest question is your timeframe.

[SouthJamaica]

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@pat0812 wrote:

I'm about to apply for a mortgage next week

Until last month I had an UTI of 32%

I got it down to about 10% and of course my FICO 8 jumped to 758 for experian, but from the reading FICO 8 is not the one to watch, but those

The FICO scores used for mortgages

• Equifax Beacon® 5.0

• Experian®/Fair Isaac Risk Model V2SM

• TransUnion FICO® Risk Score, Classic 04

Can somebody tell me what is different in those scores in the formulas?

Will those FICO scores remember my high UTI (32%) or will it only consider the current UTI only ?

How close to FICO 8 Score could I get too on those 3 variations ?

My Credit Report looks like that

Oldest Account: 4 years and 6 months

Average Age: 2 Years and 10 months

No late payments

No collections

2 Inquiries in last year

10% UTI in average over 9 credit card accounts. Balances on 3 accounts, and 6 accounts $0 balance ($95,500 credit limits)

1 Personal Loan ($550 balance left out of $3000 initially)

2 Car loans paid off

1 Car loan balance of $37,000 out of $50,000)

Do I have a chance of still getting thos mortgages FICO over 740 if my FICO 8 is 758  ?

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My mortgage scores are all 50 to 60 points less than my FICO 8 scores.

Primary reasons appear to be number of cards reporting balances, recent inquiries, and age of newest account.

[pat0812]

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@Anonymous wrote:

My comments below in blue.

---

@pat0812 wrote:

I'm about to apply for a mortgage next week

Will this be a pre-approval?  Yes, now is pre-approvals (A few months before you close?)  Or is this the final application and will immediately go to the underwriters?

If pre-approval then it is not essential to ge everything perfect yet.  If the final, then you may just have to hope for the best.  Getting all your balances reporting properly in 6 days may be very difficult. 

Until last month I had an UTI of 32%

I got it down to about 10% and of course my FICO 8 jumped to 758 for experian, but from the reading FICO 8 is not the one to watch, but those

That's right, FICO 8 will not be used by your lender, but rather the FICO mortgage scores.

The FICO scores used for mortgages

• Equifax Beacon® 5.0

• Experian®/Fair Isaac Risk Model V2SM

• TransUnion FICO® Risk Score, Classic 04

Can somebody tell me what is different in those scores in the formulas?

That won't help you.  That discussion is long and involved and you lack the background to make sense out of it.  Instead, you need actionable steps to take to raise your mortgage scores.  You give us us some helpful info below, but we need your timeframe (the questions I ask above).

Will those FICO scores remember my high UTI (32%) or will it only consider the current UTI only ?

It will consider whatever your credit reports currently say.  That may be different from last month and will also likely be different from your current balances as they read on each credit card, since today's balance have not yet been reported to the credit bureaus.  You need tools for pulling your credit reports frequently during the last few weeks.  We can suggest some of these to you.

I have been paying my balances off since the beginning of the month and tomorrow my last statement would be reported and I will be around 12% UTI, all other cards have been reported already after I paid off, I use experian credit monitoring and I keep track of my balances and my FICO 8 scores.

How close to FICO 8 Score could I get too on those 3 variations ?

My Credit Report looks like that

Oldest Account: 4 years and 6 months

Average Age: 2 Years and 10 months

No late payments

No collections

2 Inquiries in last year

You mention that you have no lates and no collections.  Does that mean you also have no derogs of any kind?  No judgments, chargeoffs, liens, bankruptcies, etc?

 None of those

10% UTI in average over 9 credit card accounts. Balances on 3 accounts, and 6 accounts $0 balance ($95,500 credit limits)

1 Personal Loan ($550 balance left out of $3000 initially)

2 Car loans paid off

1 Car loan balance of $37,000 out of $50,000)

Do I have a chance of still getting thos mortgages FICO over 740 if my FICO 8 is 758  ?

---

You have a very good chance... depending on when your final underwriting will begin.

Can you pay off one more card -- pay it down to $0?  You need your utilization at < 8.99%  10% is too high for optimum scoring.  And you also need as many cards showing a $0 balance is possible.  7 cards with a $0 balance is quite possibly better than 6 -- it certainly can't hurt.  The FICO mortgage scoring models are more sensitive to the number of cards showing a balance than is FICO 8.

Ok, I will try to report $0 on my charge card next month, and on my revolver to have max 2 cards with balances.

How much difference in score can you get with 1 card more reporting a balance ?

The biggest question is your timeframe.

 I'm just asking for pre approvals in the next several weeks

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[Anonymous]

SJ out of curiosity do you currently have a mortgage and if so, what does its utilization sit at?

[Anonymous]

Because your charge card was a complicating factor, you decided (in the other thread you posted on) to just zero it out.  (It was unclear whether it might be reporting as a credit card and possibly with a high individual utilization.)

That's a good choice.

Your steps should be:

First to get your CC balances reporting the way you want them.  That means a $0 charge card and either one or two credit cards showing a positive balance.  Make sure that at least one of the two cards is in your name (not an AU card).  And get your utilization lower thanh it is now.  You should not count your charge card and an AU cards for your total credit limit.  You want your total utilization < 8.99%.  anything in the 1-8% range is fine.

At the same time that you are working on getting your balances reporting right, you should be signing up for free tools so that you can look at carefully at all three credit reports.  It's unclear to me whether you are possibly only seeing your EX report.  You need to be seeing your EQ and TU reports too.

Then, after all three of your reports are reflecting the new CC balances, pull all your scores at myFICO.  You can do this for $30 by signing up for the 3B monitoring product.  (You can then cancel it a few days later.) This will include your mortgage scores.  You will then have the true mortgage scores and won't have to rely on speculation from people here regarding what they might or might not be.

The middle mortgage score will be what you care about.  I think it is likely that it will be above 740 at that time.  If it isn't, there's one more thing we can do, depending on what your EXperian score is.  (If you pay down your loan without paying it off you can raise your EX mortgage score though not your TU/EQ scores.  I think that is not a good idea to do right now because we don't know (a) if you need to do that or (b) if improving your EX score would improve your middle score.)

By improving your card balances I think you have a very good shot at having a middle score above 740.

[pat0812]

How many points can you lose if you have 10% and not 8.99% ?

[Thomas_Thumb]

No one can answer that with certainty. It depends on the scorecard you are in and your specific profile. If aggregate utilization exceeds 9% score will drop some and the amount of drop likely will differ among your EQ/TU/EX mortage scores. Ultimately, the only way to know is to test yourself and check under/over/under scores.

My guestimate is the difference between Ag UT of 8% and Ag UT of 11% - all else being equal may be 5 to 25 points. Amount of loss is typically higher for "clean" scorecards than for "dirty" scorecards. I have always been under 9% since I started checking Fico scores and therefore can't share specific examples for Ag UT%. However, I can tell you that # cards reporting a balance can strongly influence EQ Fico mortgage score.

I lost 45 points going from 3 of 6 to 6 of 6 cards reporting balances on EQ Fico 04 [809 => 764], 11 points on TU Fico 04 [823 => 812] and 5 points on EX Fico 98 [837 => 832].

FYI my aggregate utilization was in the 2% to 4% range for both data sets.

So, for the sake of EQ Fico 04 (score 5) limit # cards reporting, in your case, to 1 or 2 of 7.

[Anonymous]

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@pat0812 wrote:
How many points can you lose if you have 10% and not 8.99% ?

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You may also be able to help us to help you better if we understand what your real concerns are. 

The kind of question you just asked (above) is the sort of question a person might ask if they had lots of time and who was chiefly interested in credit scoring as a fun hobby.  I.e. it's a theoretical abstract question.  A good example of such a person is Thomas Thumb.  His credit scores are 850, he doesn't have any urgent practical needs associated with his score.

But I was under the impression that your interests were practical and rooted in a time-orgent need to increase your mortgage scores.  If that is the case -- and it may not be -- then that question is misguided.  You don't need to know how much -- and indeed even the experts here couldn't answer that for sure, even if they had all three of your reports in front of them.

What they can tell you with 100% certainty is that you will get some score boost if you lower your utilization a little bit.  You can do that.  So do that.  It's that simple.

Get your balances reporting a bit better, then pull your mortgage scores, and then you'll know where you stand.  The practical solution to your problem is actually that simple.

After you buy your house, if you are still fascinated by taking up the theory of FICO modeling as a hobby, feel free to come back and spend a lot of time here learning all about it.  It will take you a while just to develop a sound foundation for understanding how FICO 8 works before you'll be able to understand a lot of the other stuff -- far longer than the time you have at your disposal now.

[pat0812]

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@Thomas_Thumb wrote:

No one can answer that with certainty. It depends on the scorecard you are in and your specific profile. If aggregate utilization exceeds 9% score will drop some and the amount of drop likely will differ among your EQ/TU/EX mortage scores. Ultimately, the only way to know is to test yourself and check under/over/under scores.

My guestimate is the difference between Ag UT of 8% and Ag UT of 11% - all else being equal may be 5 to 25 points. Amount of loss is typically higher for "clean" scorecards than for "dirty" scorecards. I have always been under 9% since I started checking Fico scores and therefore can't share specific examples for Ag UT%. However, I can tell you that # cards reporting a balance can strongly influence EQ Fico mortgage score.

I lost 45 points going from 3 of 6 to 6 of 6 cards reporting balances on EQ Fico 04 [809 => 764], 11 points on TU Fico 04 [823 => 812] and 5 points on EX Fico 98 [837 => 832].

FYI my aggregate utilization was in the 2% to 4% range for both data sets.

So, for the sake of EQ Fico 04 (score 5) limit # cards reporting, in your case, to 1 or 2 of 7.

Does Charge card count in balance ? Or only revolving accounts ?

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