CREDIT SCORING

CREDIT SCORING

One of the questions that always come up is “What is my score”?  Or they come to the loan officer after pulling their credit and buying their score from the web and say, “Well, I am ready.  My score is now 642.  You said I needed a mid score of 640 and I have that.”  Then they are very disappointed when the Loan Officer pulls their credit and it is 585.  How can this be?

First of all, there are many scores:  some for mortgage, some for renting an apartment, some for insurance, some for auto dealers, and so on.  For example, I had a client that came to me with a credit pull for a rental he was considering.  It showed a 751, and he was elated.  What he did not realize was that the scoring for rental agreements is based on a 1500 maximum.  That would equate to a 425 for a mortgage pull!

Let me share with you another example:

I just received a credit report from a client, pulled on line from Zendough, a company owned by Transunion.  The score they report is a 637.  He is real close to the 640 threshold needed for FHA financing.  What he does not realize is Zendough’s scoring system is based on a 990 maximum.  He is not even close to the threshold needed.  The ironic part is what is stated on the report.  I quote:  “When lenders evaluate your credit applications, they review your credit report to get a detailed history of your credit.  And at zendough, you can see what lenders see.”  What lenders want is your score – and the score they sell has nothing to do with the scores lenders see.  It is kind of like comparing scores from a sporting event:  Dallas Cowboys 23, Minnesota Twins 8.  There are the scores – but there is no relevancy.  Those scores tell you nothing.

If you really want to know what your score is, contact a Loan Officer.  They have the real scores for mortgages.