Mortgage Credit Scores Available Now at MyFICO.com
Big news this week from MyFICO.com®, FICO® Corporation’s consumer facing website has for the first time ever started allowing consumers to actually see their mortgage credit score.
FICO® has offered credit scores on their MyFICO.com® website for years now, but they have never offered the version of the FICO® score that is used in the Mortgage industry. Previously FICO® only offered version FICO® 8 on their website. Moving forward all consumers will now get six different scores. The cost is on the high side, twenty dollars for a one repository file, sixty plus for all three.
MyFICO.com® is now providing FICO® 5 & FICO® 8 versions of the Auto Score and Bankcard score. What’s different about those particular scores is the scoring range (250 to 900). In the mortgage industry we use a FICO® 5 score with a range of 300 to 850. What I really like about this is the benefit to the consumer, there will be less confusion for people shopping for mortgages, when they get their score from MyFICO.com®.
Here’s the problem, if consumers go to any other website they will get something called the Vantage Score. Vantage is the company that the three major repositories setup to sell credit scores to consumers and the mortgage industry. Vantage® also adopted the 300 to 850 scoring range last year with Vantage 3.0 although there could still be differences in scores between Vantage 3.0 and FICO® 8 or 9.
MyFICO® offering mortgage scores is a big win for consumers. They can now finally have clarity and a better understanding of the differences between credit scores.
I find it very interesting, in this example, that the FICO® 8 score is 825 and the mortgage FICO® 5 score is 812. So you’re talking about 13-point difference between the two models and those are both based on the same repository file.
If you have seen some of my other videos, I have expressed some concerns when mortgage lending moves to FICO® 8 or 9 (what some people have predicted for next year) scores on average will trend higher than they are now. I don’t know if that’s a good thing for the lending industry or not, I think what banks will compensate and increase the minimum FICO® score.
Right now if you need a 640 FICO® 5 score to get a mortgage in the future you may need a 650 FICO® 8 or 9 score. If it is easier for people to score higher or to recover from their payment mistakes, I think it is a good thing. I’m just concerned that the banks will then increase the minimum FICO® score in order to maintain the same risk factor.
Good news for the consumer, if you want to pull a credit report and actually get your real mortgage FICO® score. MyFICO.com® is one way for the consumer to do it. There are other ways that are cheaper if borrowers are shopping for a mortgage, like Mortgage Preflight® but still a great win for consumers!
If you’re looking for other ways to improve your credit score please go to GetLoanReady.com you can get free videos and worksheets to increase your credit score from a more holistic perspective. Never Pay Collections
If you want to see more videos about credit and credit scoring check these out at www.thecreditguy.tv. If you are a mortgage lender please share this on your Facebook or LinkedIn page. If you have any questions, leave them down below I’d be happy to answer them.