Conflicting Credit Scores?

by: Mari Takeshita

Why are the credit scores you get yourself from the credit bureaus often quite different than the scores used by mortgage lenders?

The answer is simple. The scores you get yourself are generally VantageScores, which are based on a scoring range of 501-990. The scores that mortgage lenders use are FICO scores, which are based on a scoring range of 350-850.

The three credit bureaus (Experian, TransUnion, and Equifax) got together about five years ago and invented the VantageScore, hoping to get a bigger piece of the multi-billion dollar credit scoring market than they already had. Lenders said, “Forget it – we’re happy with the FICO scores.”

The bottom line is that you are always going to have a higher score if you are looking at a VantageScore credit report rather than a FICO score credit report. It can be very misleading to consumers, but that’s the way it works.

Getting a loan approved is easy – if you know what to do. Make sure the mortgage company you will be considering to do your loan will pull up your 3 bureaus, called a merged credit bureau for you and that they will do so for free. Most mortgage companies and banks charge between $75-$125 to pull your merged credit. Don’t be nickled and dimed to death. There are loan officers that are happy to do that for you for free.

Mari Takeshita
Your Realtor
Cherry Creek Properties llc