OKay, I have bought over 50 properties that I own and rent out over the past 12 years and have closed hundreds of deals for clients as well.
I always thought the credit score you obtain from all three bureau's are your "credit score". I have found out differently.
I have a client that had a middle score in the high 570's.(as pulled by the lender he was going to use) He insisted his credit report he pulls with the "credit monitoring program" he uses says his middle score is almost a 645 and his lowest score is high 590's. I was told by the lender that they take the "base credit score" from all three credit bureau's and then they put their own mathematical formula on these scores to "make" their own credit scores that they use to determine whether they will lend or not. And each lender is different, one will put more weight on one thing then another will.
Is this true? I always had an issue with credit bureau's, as I don't feel they can "make the rules" on what is considered good or bad credit but they won't tell anyone exactly how they score things! Now I find out the main score you pull on your personal credit report isn't really a valid number, it's just a "baseline" number.
How many times have you heard a mortgage company say "I can get you 90% financing with a credit score of 650 or 660, etc."? So what does that number mean? Does it mean anything at all? Is is the "base" score they are talking about or the bank they use and their "massaged mathematically applied credit score they make up"?
I have now been told that when you buy a car, they will apply a different formula then if you buy a house, or if you buy a tv or anything! So basically, we are once again in the dark, we have no idea really what are "valid" credit score is.
Maybe this is why one lender can get a deal closed while another one can't? Because the credit score they see is different!
How frustrating..
Craig Bartels
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I think the whole "fico" is a mess right now - there isn't any standard really and as a consumer I can "play with it" and get it to move by doing some pretty simple things!! My son who is 25 called and was all in a tizz because his score had dropped from 745 to 720 (pretty good score I think) but he was in a panic. I told him to call his 2 credit card companies and have his credit limit raised so that he was showing only 30% of debt compared to available credit. He did and they did. Next month his score was at 770. All a joke really!!!