Credit Scores

General Real Estate Investing
1

I have been through a hard couple of years financially. I sold a business and carried a note for the buyer. After a couple of months he quit making payments to me all of the suppliers/creditors and the royalty payments to the national franchise. Anyway, I had to repo the business from him but it killed my credit because most of the business accounts that he didnt pay were still in my name ( I know, I shouldnt have done this, but he was supposedly a good friend).

After a few months of challenging my credit report and paying my debts on time, I pulled a credit report on me and my wife. The scores were still low, but good enough that we could finally buy a house to live in. After I went to the mortgage company and applied for the loan, they pulled thier own credit report and the scores were substatially lower.

These reports were pulled less than 2 weeks apart and from what I can see, there isnt anything different in them other than the scores.

How can theses score, from the same 3 reporting agencies, be so different between my report and the one the mortgage company pulled?

Maybe some of you mortgage people out there can help me???

                      Brian
2

I’ve heard rumors that consumer credit reports i.e., free credit report dot com and the like, show higher scores than what we see. Maybe someone can confirm the accuracy of that statement, I don’t know. I do know that having your credit pulled dings your score. How much it dings your score is dependent on the stregnth of your credit.

:-\

3

Mortgage Companies pay for different things to be checked in your bureau that you as a consumer can not get.
We can pay for the fraud alert and hawk alert which are just a way to know if anyone has taken your identity, we pay for the year of issuance of your social security number, and there are different models that we see that you can’t. Even different credit bureau companies have different scores like… landsafe is one company that pulls credit between the three bureaus, factual data is another one, credco, and cbc are all huge companies that score different things.
The credit bureau score is a giant to try to master but I can tell you a few tips.
Make sure your revolving availability is above 50% of the limit. If it is not that means you are on your way to maxing out your credit and it can pull your score down.
Don’t let anyone pull your credit for anything except a mortgage…then deal with someone who will only pull it once and use that report to shop your loan with.
make sure from this day forward you are never late on anything.
keep disputing anything that is wrong on your report and back it up with reciepts and keep everything in writing.
Keep a credit bureau file and everytime you have anything paid…get a reciept while you are on the phone…make them fax it to you.
Hang in there and it will come back strong.

4

Their are several ways your credit score could have dropped in just two weeks. Did you take a zero credit card balance up in a hurry? Did you shop around for or apply for many different cardit cards? Did you buy a car?
re-fi anything? Take out a new personal loan? Sometimes people will get their score up, apply for a mortgage loan and get pre-approved, then think they are all good to go and then go out and take out a personal loan for the 20% downpayment. Then the lender pulls the score again and you have new debt and a lower score. Also, that business you spoke of… It’s possible someone reported something that was still in your name yet again. Don’t forget you can always visit myfico.com and pull all three reports for about 45 bucks and see exactly what is on your report as of this minute. I don’t work for them, I subscribe to score watch and when my score moves, it’s sent to my email and cell phone. I then check to see exactly what my report looks like. Be VERY careful about sending soc sec #'s over the internet though. Identity theft can happen that way. It can be done by mail. If I remember right, everyone get’s one free one a year and you check on this, don’t take my word for it, But I believe that when you check your own scores it does not count against you. They also have some great reading there to better understand the scoring process.

5

the scores you get from myfico or the fantasy scores from experian called experian plus have absolutely no bearing on what your mortgage broker will pull. this is based on my personal experience.
i don’t know, but they are usually a lot higher. dont waste your money on them.

6

Credit scores is a summation of many factors such as payment history, amount owed on loans or credit, length of credit, and so forth. You’ve mentioned that you had pulled credit - that may have lowered your score. The mortgage company that pulled your credit is also reason for lowering your score (hopefully it was just one mortgage company).

Any time you apply for loans or credit cards, etc…, this will lower your score so be very careful.

As for the 3 credit bureaus, they all have different scoring systems, therefore your scores for the 3 should never be the same. I believe that the middle score is the score that most companies use when looking at your score, so of the three, they will use your middle score.

7

Thanks for all of the replies. I pulled my own credit report the first time and supposedly when you pull your own in doesnt ding your score. Also, there is absolutely nothing different between the one I pulled and the one the mortgage company pulled…except the scores. I have not applied for any new credit in the last few months and I have actually paid off one debt that should have raised my score.

I also subscribe to a credit alert service through Experian and they notify me of any changes to my report…there havent been any for at least a month prior to me pulling my report.

I think this whole thing is a fraud. How can they tell me one yhing and someone else another? It seems like there should be a fair credit law concerning this.

        Thanks again for all of the responses
8

A quick question about getting credit scores. I have never checked mine. I tried to get a free copy, but just got the runaround. What is the best and most hassle free way to get a reliable report/score. I don’t mind paying for it, I just hate to get run around and then get no results. ???

DB

9

I went to Experian.com and got mine. You can get all 3 scores from them and it costs about $20. Not really sure how accurate they are though. Mine were different than what my lender says they are.

10

Mine were the same. Some could be using a three score average, my lender used the middle score.

11

Lendinghand posted an interesting article…

http://www.reiclub.com/forums/index.php?board=26;action=display;threadid=9220

12

I disagree with what one poster said above. If you need a credit score only get them from myfico.com. Their credit scores are on the money! Nearly all other websites out there are just scamming you. If you read the fine print on them it usually says they are giving you a simulated score. A simulated score is worthless.

With my myfico.com subscription I get my credit score and credit report from TransUnion every 3 months. Every time I have gone to a lender this score has been accurate and I have not seen a variance of more than 2 points. Of course, your credit score is constantly changing and mine must of went up 2 points so I was expecting that.

13

THIS article may help sort out the different ranges of scores you may be experiencing.

http://www.myfico.com/CreditEducation/CreditScores.aspx?fire=5

Jeff

14

I’ve been in the car business for 20 years and the bureau that is pulled is the “Auto Beacon 520” this is doen thru Equifax,Trans Union and Esperion (Sp). What I’ve seen more than anything that kills a beacon score is recent inquires and high balances on revolving debt. I know several years ago I had alot of credit cards and most were maxed out etc. I had a beacon in the low 500’s. I paid my bills but paying the monthly minimum was killing me. I took out an equity loan at 8% and paid off those high interest credit cards and cut the up. I kept 3 that I use now that have low rates on them and I ALWAYS pay them off in 3mo or less. As a result my score is in the high 600’s to low 700’s now. Hope this helps.

15

www.annualcreditreport.com

Everyone is eligible for one per year. Then if you want to pay for your score you can. It is a great way to see what is going on in your credit. And make sure you dispute anything that is incorrect.
In writing to all three agencie. And make sure you hold those agencies accountable for removing errors. Follow up with them in 30 days.
If you would like I can email you some stuff on credit scores.

Good Luck

16

I noticed that you said you fixed some of the problems yourself. When you did that did you?

  1. Send out a verification of inquires (VOI)

Inquires will stay on your bureaus longer the one would think that is a huge reason for lower scores.

  1. Did you put fraud protection on thru experian .

One of the main reasons for this is that way creditors can not run your credit over and over bringing down your score by all of the inquires.

REMEMBER I AM NO CREDIT EXPERT! AND CONTACT ONE BEFORE YOU GO THRU ALL OF THIS ON THE OTHER HAND IT HAS WORKED FOR ME AND OTHERS

17

What is a verification of inquires

18

Scoring can be confusing for sure.

The big three did not want to make information available to the
consumer and one reason was it was hard to hold them accountable
if you did not understand what was happening and another was
concern that once a system is understood it is easier to manipulate.

Since they have been forced to make this information available, they
are still not required to make the process fully understandable. Hence,
a lot of misinformation is being spread around.

It is my understanding that the big three do not score themselves, they
just collect information for resale to other companies like true credit,
chase credit, credco, cbs, factual data, ect…

These companies score using their own scoring models and often times
A lender will choose a company whose model best suits their needs. This
could even mean because the scores run a little lower.

As a lender you want customers that really should have better scores but,
be able to sell them a higher profitable product.

Lower risk customers buying products that were designed for higher risk customers.

Now on another note, many of you trying to create credit may be interested in the
Following service. I have no experience with this but had it brought to my attention
by the company that I pull credit through, when I am making a tenant or mortgage
decision on an applicant.

http://www.accountnow.net/default.aspx?pcode=P0005Ct000Skl00

http://prbc.com/consumers/how/billpaypart.php

http://prbc.com/consumers/

http://www.advantagecredit.com/products/products_list.aspx#products12
Look at the ScorMor section

http://www.advantagecredit.com/member_area/customer_service.aspx

Moneytalks