Credit Scores and The Use of Them

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Real Estate Agent with Elite Home Sales Team OC BRE# 02066030
https://activerain.com/droplet/MdY

Credit Scores and The Use of Them 

The credit score you find at reporting agencies may not be the credit score your lender uses when you apply for credit.

However, your credit score could make or break a mortgage application or application for other credit.

A credit score weather better or worse, than the FICO score is not easy to predict.

The CFPB's new "Analysis of Differences between Consumer-and Creditor-Purchased Credit Scores" is a follow up to CFPB's report earlier this year, "The Impact of Differences Between Consumer- and Creditor-Purchased Credit Scores," which revealed the different sources and types of credit scores and potential for harm associated with their differences.

Part of the problem is the information is not universal in any one reporting agency.The stores, banks and other companies select who they report to.This will account for some of the differences.

Remember the scores are a numerical representation of your credit report. If your score is low the greater your risk for default on credit. While, the higher the score, the lower

The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Consumer Financial Protection Bureau (CFPB) to compare credit scores sold to creditors and those sold to consumers by nationwide credit reporting agencies to look at the differences.

CFPB analyzed credit scores from 200,000 credit files from each of the three major nationwide CRAs: TransUnion, Equifax, and Experian.

CFPB found:

• Different scoring models would place consumers in the same credit-quality category 73 to 80 percent of the time.

That is, if a consumer had a good score from one scoring model, the consumer likely had a good score on another model.

• Different scoring models would place consumers in credit-quality categories that are off by one category 19 to 24 percent of the time.

• Different scoring models would place consumers in credit-quality categories that are off by two or more categories from 1 to 3 percent of the time.

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Rachell Lara & A List Properties 11/24/2012 02:03 AM
Topic:
Mortgage / Finance
Location:
California Orange County San Clemente
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Rainmaker
1,017,527
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Credit scores drive the mortgage rate you can get.  You just can't see the FICO only the scores from the credit bureaus.

Nov 21, 2012 12:35 AM #1
Rainmaker
849,373
Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

You are right Tim thanks.  Have a wounderful Thanksgiving.

Nov 21, 2012 12:37 AM #2
Rainmaker
171,018
Rachell Lara & A List Properties
eXp Realty / 619.316.7445 - San Diego, CA
A List Properties - San Diego Neighborhood Experts

Interesting post, no wonder consumers are always confused about their credit scores.

Nov 24, 2012 01:49 AM #3
Rainmaker
849,373
Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

Yes Rachell it is confusing.

Nov 24, 2012 02:53 AM #4
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