i'll be searching for a mortgage in a few months. my first purchase, so i've only recently gotten interested in my credit score. (sounds very irresponsible, i know.) can anyone shed any light on the whole thing? i just signed up to myfico.com to get all my scores. i'm shocked at how much the score varies from transunion to equifax to experian. i'm sure it's nothing to you guys, but my best score... [more]
i'll be searching for a mortgage in a few months. my first purchase, so i've only recently gotten interested in my credit score. (sounds very irresponsible, i know.) can anyone shed any light on the whole thing? i just signed up to myfico.com to get all my scores. i'm shocked at how much the score varies from transunion to equifax to experian. i'm sure it's nothing to you guys, but my best score comes from equifax (813). my experian is a bit worse (779), but my transunion is just horrible (691)! that's a lot of variance! is there any sense of which of the three that banks use, or is there a standard mean/median procedure? is there a sense that certain banks weight one agency's score, while other banks weight a different score? is there any anecdotal evidence about the nature of each of these agencies? e.g., "experian tends to overweight X factor, while transunion ignores it; equifax really likes Y factor in its assessment."
any wisdom, much appreciated!
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Response by West81st
over 17 years ago
Posts: 5564
Member since: Jan 2008
Back when I was in the business (about a hundred years ago), they all used essentially the same Fair-Isaac algorithm. I don't think they have deviated much since then. An outlier like your TransUnion score is usually caused a difference in data, not the way the data is used. Does your myfico membership entitle you to full reports, or just the scores? If you're just getting scores, it might be worthwhile to pull the complete TransUnion file and verify the derogatories.
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Response by forced_to_register
over 17 years ago
Posts: 25
Member since: Jul 2007
You can get a full report from each agency (you are entitled to one free per year)by going here https://www.annualcreditreport.com/cra/index.jsp. The three bureaus always seem to have different scores. My understanding is that most companies (other than credit card companies) only report to one agency or two at the most which would result in slight variances in scores.
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Response by 93rd
over 17 years ago
Posts: 69
Member since: Apr 2008
Got a mortgage from Citi 2 weeks ago and they take the median value - the one in the middle - in your case 779.
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Response by MortgageMan787
over 17 years ago
Posts: 96
Member since: May 2008
Banks use the middle score. In your case, experian. WIth a 779 Score you should have no problems getting a mortgage (as far as credit goes) unless you have no tradelines. Banks like to see a history of you paying people back. If you score only reflects one or two creditors, they may ask for additional info.
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Response by dledven
over 17 years ago
Posts: 198
Member since: May 2008
The bank uses the middle score as long as you have open tradelines with at least one tradeline greater then 24 months, and you need to have at least one other tradeline opened for 12 months,
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Response by luciato
over 17 years ago
Posts: 106
Member since: Mar 2008
excuse me for my ignorance: by "tradelines", does that just mean credit cards and other forms of debt? i have plenty of history with credit cards, student loans, etc. ... FYI, i did look at the credit reports themselves. i have one delinquent payment for my student loans, but that was quite a while ago, and the loans (over $150K worth) are all paid back now anyway. there seems to be an option to dispute it, but i'm not sure it would be a dispute -- i *did* miss payment. it's just that i'd like to interpret it as irrelevant now because the balance has been paid in full. more importantly, doesn't it seem kind of harsh to deduct 100 points for *one* missed payment?
another question: if the banks use the median score, that means by definition that they must pull all 3 scores (to determine the median). thus, even if the median is used, would it not raise a red flag with them that the upper/lower bounds are so different? maybe i'm overthinking this?
recently bought at the Jasper, went through a pre-qualification process, but in the end, didn't need to do anything to sign the contract since closing isn't for at least 6 months. but i'm just trying to get prepared for the process: cleaning up credit scores, cleaning up my checking/trading accounts to make them look clean for 3 months, etc. ......
i am glad to hear that everyone thinks 779 is sufficient. if anyone thinks differently, please chime in!
thanks all, for your advice!!
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Response by 93rd
over 17 years ago
Posts: 69
Member since: Apr 2008
The FICO requirement was 780 for Fannie Mae loans. But I am not a specialist.
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Response by forced_to_register
over 17 years ago
Posts: 25
Member since: Jul 2007
You are already pre-qualified? So you have begun the mortgage process and your scores did not pose a problem with your prosective lender. If the lower score is bothering YOU, just dispute it online or by phone.
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Response by dledven
over 17 years ago
Posts: 198
Member since: May 2008
disparities are common, and paying off a student loan is big in the banks eyes and on your credit score, don't be alarmed, if anything one of the credit bureaus is probably not reflecting the entire picture, you can try to dispute, but thats an uphill battle, i have seen clients try this for years with no success, their are tricks to this and we do this for our clients (supplemental report issued), (direct online dispute where reporting agency has less 48 hours to respond online through reporting agency), but again you have nothing to worry about with regards to your fica score. the banks are most concerned about your DTI #'s (Debt to Income) to ensure that you can afford your new purchase,
if your new purchase and loan is within the new guidelines then your DTI #'s can be all over the place, however if it is a jumbo loan then the banks are very strict with this,
what is the purchase price? and how much down?
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Response by voracious reader
over 17 years ago
Posts: 41
Member since: Apr 2007
"Your Credit Score" by Liz Pullman Weston is perhaps the best book to read regarding your credit score. Many of the questions raised in this thread are thoroughly answered in her book. Some of the answers given here are far from the complete and best answers.
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Back when I was in the business (about a hundred years ago), they all used essentially the same Fair-Isaac algorithm. I don't think they have deviated much since then. An outlier like your TransUnion score is usually caused a difference in data, not the way the data is used. Does your myfico membership entitle you to full reports, or just the scores? If you're just getting scores, it might be worthwhile to pull the complete TransUnion file and verify the derogatories.
You can get a full report from each agency (you are entitled to one free per year)by going here https://www.annualcreditreport.com/cra/index.jsp. The three bureaus always seem to have different scores. My understanding is that most companies (other than credit card companies) only report to one agency or two at the most which would result in slight variances in scores.
Got a mortgage from Citi 2 weeks ago and they take the median value - the one in the middle - in your case 779.
Banks use the middle score. In your case, experian. WIth a 779 Score you should have no problems getting a mortgage (as far as credit goes) unless you have no tradelines. Banks like to see a history of you paying people back. If you score only reflects one or two creditors, they may ask for additional info.
The bank uses the middle score as long as you have open tradelines with at least one tradeline greater then 24 months, and you need to have at least one other tradeline opened for 12 months,
excuse me for my ignorance: by "tradelines", does that just mean credit cards and other forms of debt? i have plenty of history with credit cards, student loans, etc. ... FYI, i did look at the credit reports themselves. i have one delinquent payment for my student loans, but that was quite a while ago, and the loans (over $150K worth) are all paid back now anyway. there seems to be an option to dispute it, but i'm not sure it would be a dispute -- i *did* miss payment. it's just that i'd like to interpret it as irrelevant now because the balance has been paid in full. more importantly, doesn't it seem kind of harsh to deduct 100 points for *one* missed payment?
another question: if the banks use the median score, that means by definition that they must pull all 3 scores (to determine the median). thus, even if the median is used, would it not raise a red flag with them that the upper/lower bounds are so different? maybe i'm overthinking this?
recently bought at the Jasper, went through a pre-qualification process, but in the end, didn't need to do anything to sign the contract since closing isn't for at least 6 months. but i'm just trying to get prepared for the process: cleaning up credit scores, cleaning up my checking/trading accounts to make them look clean for 3 months, etc. ......
i am glad to hear that everyone thinks 779 is sufficient. if anyone thinks differently, please chime in!
thanks all, for your advice!!
The FICO requirement was 780 for Fannie Mae loans. But I am not a specialist.
You are already pre-qualified? So you have begun the mortgage process and your scores did not pose a problem with your prosective lender. If the lower score is bothering YOU, just dispute it online or by phone.
disparities are common, and paying off a student loan is big in the banks eyes and on your credit score, don't be alarmed, if anything one of the credit bureaus is probably not reflecting the entire picture, you can try to dispute, but thats an uphill battle, i have seen clients try this for years with no success, their are tricks to this and we do this for our clients (supplemental report issued), (direct online dispute where reporting agency has less 48 hours to respond online through reporting agency), but again you have nothing to worry about with regards to your fica score. the banks are most concerned about your DTI #'s (Debt to Income) to ensure that you can afford your new purchase,
if your new purchase and loan is within the new guidelines then your DTI #'s can be all over the place, however if it is a jumbo loan then the banks are very strict with this,
what is the purchase price? and how much down?
"Your Credit Score" by Liz Pullman Weston is perhaps the best book to read regarding your credit score. Many of the questions raised in this thread are thoroughly answered in her book. Some of the answers given here are far from the complete and best answers.