understanding a credit disclosure

[Anonymous]

Hello all, a noobie here and just trying to gain a better understanding information found on a credit disclosure I received recently in relation to a mortgage refi I'm working on.

On the surface everything seems to be on the up and up with what would appear to be positive numbers, but then when you couple that with the negative tone that is used in how that score was arrived at it gives one a moment of pause.  I'm somewhat concerned about the lowest score above, but not terribly.  It's pretty decent and I'm sure if I work at it I can improve it over time.  The comments, I understand they're intended to explain how they've arrived at scoring decision they have but it still is enough to make you go HUH. 

This is what it shows:

Beacon 5.0 Score:    +802

Time since most recent account opening is too short

Amount owed on revolving accounts is to high

Proportion of balances to credit limits too high on revolving accounts

Too many inquiries in the last 12 months

Classic Score:     +780

Time since most recent account opening is too short

Insufficient length of revolving credit history

Proportion of loan balances to loan amounts is too high

Proportion of revolving balances to revolving credit limits is too hight

Fair Isaac Score 2:     +772

Proportion of balance to high credit on revolving accounts

Too many inquiries last 12 months

Length of time accounts have been established

Too many accounts with balances

Kevin

[haulingthescoreup]

Hi, welcome to the forums!

With high scores like these, it's really only the first, maybe second reasons that affect each score. The formulas automatically generate the top four factors, but the higher the score, the less impact the subsequent factors have.

It looks like you have balances reporting, and that's hurting your Experian score, and to some extent the other two as well. Even if you pay off your cards every month, if they report the balance due to the credit bureaus, you're scored as if you owe that much. Which you sorta do, of course, but it doesn't differentiate between those who pay in full and those who pay minimums. Pay all but one of your cards off before the statements post, so that they report $0, and you'll see EX rise, if you app for another mortgage, that is. It might help the others, too, especially Equifax, where it's listed 2nd.

How long since your more recent account was opened? That's making EQ and TU sad.

How long before some of your Experian inquiries hit one year?

Don't go crazy chasing every reason. Concentrate on the reported util, and just let time do its thing with the others. And since even your lowest score is plenty good enough, don't stress about it.

[MattH]

As Hauling says, with scores like these you should have no problem getting approved.  Unless you are one of the very few (several thousand in the entire US, I believe) people with perfect 850 scores there will be something in your profile that is preventing you from having that perfect score.  Most banks go by the middle score, or with co-borrowers the middle score of whoever has the lower middle score, and even your lowest score is high enough for just about any bank.  In this range of FICO scores, the bank will not worry much about your credit history, the underwriter will focus on other data such as income verification and the assessment of the property that is being purchased.

[Duke-of-Earl]

I think you should be OK.  I sympathize totally with your concerns, having been in exactly the same position recently.  I only got the "Amount owed on revolving accounts is to high" and "Insufficient length of revolving credit history" dings, but in my case at least, both were absolutely false.  Like you, I was concerned that these might completely vitiate the relatively good scores I got.  I posted about this situation (on the mortgage board) and got similar reassurances to the above (thanks to those who commented there).  I also asked my LO about it.  She said "I haven't seen a score report that didn't have a lot of those comments for many years.  I just ignore them."  It did all go through OK for me, got the loan I wanted on favorable terms.

This whole subject seems to have become a sore point for a lot of posters.  I remember reading a post about it, several months ago, which explained that the CRAs were under some regulatory pressure to help people improve their scores, and this was the reason that at least one baddie was always mentioned.  Sounds OK to me in general, except that I have to wonder why the same regulators don't seem to care if at least some of the baddies are clearly total fabrications.  It mattered to me, but I decided it was better not to impede the process by disputing these falsehoods.  I survived, and I hope you can, too!