Mortgage lenders and FICO

[lmohearn]

My husband and I are trying to refinance two mortgages. We own a rental property besides owning our residence and that is the first mortgage we are refinancing. I have been reading here and in other places that there are different FICO scores. Will the scores our mortgage lender pull be the same as what I see from the myFICO website? If yes, we'll be fine. If no, we're going to be disappointed in what rates are available to us. 

[pizzadude]

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@lmohearn wrote:

My husband and I are trying to refinance two mortgages. We own a rental property besides owning our residence and that is the first mortgage we are refinancing. I have been reading here and in other places that there are different FICO scores. Will the scores our mortgage lender pull be the same as what I see from the myFICO website? If yes, we'll be fine. If no, we're going to be disappointed in what rates are available to us. 

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The Equifax score sold here will match the mortgage lender FICO EQ score.    The TU score sold here is an older FICO version and the EX score sold here is a newer FICO version, so they'll likely both be off.

[kkapdolee]

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@pizzadude wrote:

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@lmohearn wrote:

My husband and I are trying to refinance two mortgages. We own a rental property besides owning our residence and that is the first mortgage we are refinancing. I have been reading here and in other places that there are different FICO scores. Will the scores our mortgage lender pull be the same as what I see from the myFICO website? If yes, we'll be fine. If no, we're going to be disappointed in what rates are available to us. 

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The Equifax score sold here will match the mortgage lender FICO EQ score.    The TU score sold here is an older FICO version and the EX score sold here is a newer FICO version, so they'll likely both be off.

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+1

TU sold here is TU FICO 98 Classic

EQ sold here is EQ FICO 04 Classic

EX sold here is EX FICO 08 Classic

The scores mortgage lenders use are the three FICO 04 Classic scores: EQ 04, EX 04, and TU 04.

Therefore, the EQ you buy here is going to match the one lenders pull precisely.

You can also obtain free monthly EQ 04 score from a credit union called DCU by getting their checking account and credit card (if you have time right now to apply and get a membership + checking + cc before applying for mortgage).

If you're a PA resident, you can join PSECU and get their cc for a free monthly EX 04 score. That way, you'll have 2 out of 3 scores covered and will know what the worst rate you could possibly get is.

If you have Capital one credit card, you can go on line and ask for a CLI on one of your cards. If they deny, they will send you a letter containing your EQ 04 score but is usually a month old. If they do give you your CLI, you can ask for another CLI immediately afterwards then its a guaranteed denial and will send you your letter with FICO.

[lmohearn]

This whole credit scoring system just seems to suck! It should be the SAME number across the board, period. Once a new "release" comes out, like FICO 04, FOCI 98 should go away.....

It is impossible to truly know where you stand the way things are now and I can't be the only person that finds that incredibly frustrating. Last year I applied for a small credit line at a local store and the scores I was DENIED on were so far off from what I had pulled the day before. 

Unfortunately for me the authorization to pull credit forms have already been signed and submitted so it is what it is. We'll see how far off the scores are from the ones I pulled the other day. 

[llecs]

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@lmohearn wrote:

This whole credit scoring system just seems to suck! It should be the SAME number across the board, period. Once a new "release" comes out, like FICO 04, FOCI 98 should go away.....

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The reasons they are different is because every demographic is different with each lender. Some lenders find the older FICO versions are a better predictor of risk than the newer ones and some find the newer are better than the old. FICO will take data from lenders from past loans, run that data into a given FICO version, and report back to the lender as to which version was a better predictor of risk. That's why you see several different Classic versions out there. Then there are specific types of lenders who have their own needs like auto, installment, CC, etc. 

[kkapdolee]

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@llecs wrote:

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@lmohearn wrote:

This whole credit scoring system just seems to suck! It should be the SAME number across the board, period. Once a new "release" comes out, like FICO 04, FOCI 98 should go away.....

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The reasons they are different is because every demographic is different with each lender. Some lenders find the older FICO versions are a better predictor of risk than the newer ones and some find the newer are better than the old. FICO will take data from lenders from past loans, run that data into a given FICO version, and report back to the lender as to which version was a better predictor of risk. That's why you see several different Classic versions out there. Then there are specific types of lenders who have their own needs like auto, installment, CC, etc. 

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Is this really the reason? I always suspected some of the smaller companies just didn't want to pay for the newer versions of FICO..

[llecs]

I like the analogy in the link below...Take MS Windows as an example. Why Do some have Windows 8, others Vista, etc.? For the same reason there are different FICO versions, banks pick and choose what works best for them and therefore why change if it's working.

http://www.bankrate.com/finance/credit/how-many-fico-credit-scores-do-you-have.aspx

[AndySoCal]

Usually mortgage lenders will pull Equifax Beacon 05, TU Fico 04 and Experian FICO V2. score models.