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Lender Scores Different From Credit Bureau Scores

Thanks, in advance, for any guidance you can share!

My wife and I are looking to purchase a new home and we're having trouble with the mortgage companies and the credit scores they say they are coming up with.    My wife and I both subscribe to credit monitoring directly through Transunion and Experian.  Through this service, we track all three major credit reports and credit scores.  The day we sought pre-approval for the mortgage (30 year conventional), we refreshed our reports and the scores were as follows: Me - 799, 766, 710 / Wife: 720, 715, 712.  With these scores, and our combined incomes of nearly $200,000 annually my wife and I thought we were in a good position for a mortgage.

Following a review of our application, the lender returned with a very different set of credit scores.  For me, he had 670, 661, 610 and for my wife he came back with 710, 690, 670 - and based our interest rate at the lowest middle score - 661.  In objecting to the lenders findings, they told us the scores Transunion and Experian and Equifax provide us on our credit reports are not the scores they use to determine credit worthiness for mortgages.

Can anyone help explain what is going on here?  When calling Transunion to ask about the scores the lender received, the representative didn't know what I was talking about and said that while there are different scores for different types of credit being sought, the scores are generally all the same and are very near to the scores we see with credit monitoring.

We're not looking to by a million dollar home - our price point is $500,000 - well below what we could afford with a 30 year conventional.  We just need to know what the lender is looking at so that we can try to improve those scores.
  • July 05 2013 - Princeton Township
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Answers (4)

Out of the 3 responses below, Clay is the only one that is correct.  Loan officers at banks aren't credit experts, they are experts at structuring your loan and making sure you can qualify.  Most only have general credit knowledge.

There are many "brands" of credit scores on the market.  Typically consumers (you) purchase a brand of score that is different from what banks use (FICO).  

FICO scores have been around for decades.  It's only since 2003 that consumers were able to buy their own credit scores online.

TransUnion, Experian, and Equifax created their own brand of credit scores years ago which are not FICO scores.  If you've gone to the TransUnion website and bought your scores, they are TransRisk or "Vantage" scores.  Their scoring scale is from 501-990.  FICO uses a scale from 300-850.

If you've purchased a score from Experian, then it's a "Plus" score, again which is not FICO.  

The only website online that you can get all 3 FICO scores is myfico.com.

But from the scores that you said the lender told you, you have decent credit.  I'd recommend looking at your credit card balances and how they're reporting.  It's best to keep CC balances below 30%, 10%, or best if paid off completely until you finish your mortgage loan.  

CC balances and any other revolving account drive your scores more than you realize.  I've seen scores change by 40-80 points just by reducing balances.  If you're maxed out and pay off, that's typically when you see the biggest increase.

If you need more info contact me through my profile.
  • July 07 2013
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Lenders use Fico scores, the scores you pull are not Fico.
  • July 05 2013
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We suggest that you meet with a loan officer at two local banks.  Have them explain to you why lender credit scores are lower than those you receive from the credit scores you receive.  Then ask them what you can do to improve your credit for the banks.
  • July 05 2013
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Princeton Twp,
The lenders (me) pull whats called a tri-merge. That is all 3 bureaus at one time.  Throw out the high score (US judge) and the low score (East German Judge) and the middle is your credit score.  The reason why your consumer purchased credit score is HIGHER than your real score is because you are paying for it.  They "goose" your scores so that you continue with their credit reporting services.  I am sorry to say the scores that the lenders pull from the over 100 credit aggregation services that exist are the REAL scores.
I am a NJ based mortgage bank lender in Monmouth County and I would be happy to assist you further. [Email removed by Zillow moderator. Please see our Good Neighbor Policy.]
Thx-Dave
  • July 05 2013
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