Mortgage score versus FICO 8 score

[Anonymous]

Hello,

I was wondering which score does the major mortgage banks pull in order to determine your rate.  Is it the score you see when you first log on or is it the mortgage score?  I'm thinking of getting a preapproval with Wells Fargo and Quicken for a mortgage and right now my middle FICO 8 score is 703 however my mortgage scores are much higher.  Thank you for any input!

[DollyLama]

Normally the mortgage score. But be prepared, just because the scores are higher, the DTI factors a great deal,  overall utilization which may be weighing down your FICO 8 scores AND affects mortgage scores also, clear up any derogs, ie, late pays, collections if any. If you fall in this category, to make underwriting easier to explain, or they request payoffs of collections. Be prepared overall, down payment, closing costs, DTI at it's absolute best, and good scores. And whatever you do, do not apply for any new credit now, during a mortgage process, nothing until you close. They will pull your bureau just prior to closing, and some have learned a shocking lesson, because they went out and bought new furniture, appliances before they closed on the mortgage.

[Anonymous]

Thank you @DollyLama!  I have been working to get all my credit cards paid so that my utilization is less than 30%.  I've paid down two cards to 30% however haven't seen any change in my FICO 8 score, but I'm wondering if that's because I have a citi card which is at 97% utilization which is keeping my score from moving.  My goal is to have all my cards (5 right now with balances) paid down to 30% by February so that I can have a score over 750 before applying for a mortgage.  It's so frustrating because I've been paying down my cards but haven't seen my score move that much in the past two months.

[Anonymous]

Yeah, the card at 97% is a huge problem.  FICO looks at total utilization but also at individual utilization.

PS.  Having a card at 97% for more than one month in a row puts you at risk of what is called Adverse Action.  That means creditor closing cards, lowering credit limits, etc.  You need to start making speedy progress on lowering all cards (including that one) to < 69%.  Next step after that would be all cards to < 49%.  Then start creating as many $0 balances as you can.  Finally pay the last card down to < 29% with your total utilization < 9%.

[Anonymous]

Thank you for the great input!  I am definitely going to tackle paying that credit card down next, and follow with the rest.  I wish I could pay them down more aggressively so that I can eliminate all but one card but I'm trying to save for a down payment for a house as well.  Question regarding the adverse action - is that something that they would do automatically or would they send you any notice prior?  Thanks again!

[Anonymous]

AA can and often does happen without any warning.  Also, a CC issuer on whose card your balance is low can take AA against you based on your high balances on a card help by another issuer.  Thus, if your Chase Freedom has a 32% utilization, Chase could lower your credit limit based on seeing that one or more of your Citi cards have a 95% utilization.

[DollyLama]

I'm not sure, but I believe running at max, they can do it with no notice. To help prevent this, make the payments as high as you can afford over the minimum, it will at least show your not just carrying the balance with minimum only due. And don't charge on any further cards. I think getting the 5 balances under 30% is a good FIRST starting goal, but before mortgage, do not carry balances or let any balance report on max 2 cards. It may be viewed that you "live" on credit, and it also dings your scores carrying balances on too many accounts, especially all of them.