“Why are the credit reports that your mortgage company pulled different than the one I pulled from an online credit reporting service??”
This is a question we are asked on a daily basis, check out the article below for the important information you will need to help you better understand your credit report and where the scores report from.
If you are not familiar with credit reporting and credit repair, then the approval process can be a little confusing. The lending professionals at Diamond Residential Mortgage Corporation are here to assist you every step of the way. Here is a quick read of vital information on your credit report and how each bureau reports. We have many clients call with questions about there credit score when it is reporting lower than they had originally thought. Our friends at National Credit Care have produced an amazing article to help explain the process of reporting credit.
How many people have checked their scores lines online at some point? There is no great data on this but we are thinking the majority of everyone has checked their scores online. Now, out of all these millions of people, how many could use these exact scores for lending purposes? We are going to go with 0, give or take. This is due to the fact that online scoring models, even the ones provided by the bureaus themselves, are completely different from the scoring models that lenders use when a loan is being applied for. This makes the average online and the credit bureau’s scoring models completely worthless.
How is this legal you may ask? They don’t claim they are giving a FICO lending approved scores, they are saying is what “we” calculate your score to be, based on our system. Even on the rare occasion if they use a FICO model, there are over 50 of those scoring algorithms created so it’s unlikely to be the one your lender is using. Some of the online scores are so off it seems like a bad joke, like Transunion direct source who is Truecredit, their score range goes from an 501 to a 999 so you easily see yourself with an 800 or 900 but that doesn’t mean it’s worth the paper it’s printed on.
Another laughable aspect about this system is that you notice how a consumer never applies for a loan only to find out that their score is actually much higher than what they recently pulled online. In fact the average online score is roughly 40 points higher than what you see through a lender. The conspiracy theory behind this is that the better score you show someone on average, the more people you will attract to your website through referrals.
What is one to do? I tell you what, we happen to specialize in the scoring models and algorithms used by mortgage professionals and lenders. A fun test to give us will be to tell us over the phone which credit provider you are using to pull credit through and we instantly will be able to tell you the exact algorithm models you are using. When securing loans in the credit repair world, understanding exactly how the scores are calculated is most of the battle.
-National Credit Care
Do you understand the benefits of taking an active approach to monitoring and understanding your credit report?
Visit www.annualcreditreport.com – the ONLY source for accessing your free credit reports guaranteed by federal law. This governmental monitored website requires each of the three nationwide consumer credit reporting companies – Equifax, Experian and TransUnion – to give you a free credit report every 12 months.
If you have any questions on your credit score or credit repair, please leave your comments below or contact information and a member of our team will contact you shortly.