More Facts about Credit Scores
I just received this in my E-Mail from our mortgage officer, Justin Vicino. I thought it was worth posting, because it may answer a lot of questions you as consumers may have.
Just so everyone is made aware as I have received many questions about credit and credit scoring…
The score allows for “rate shopping.” Looking for a mortgage or an auto loan may cause multiple lenders to request your credit report, even though you're only looking for one loan. To compensate for this, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. In addition if approved for a Fannie Mae loan, the credit is good for 120 days and there is no need to pull the credit again unless going beyond that timeframe.
There are many commercials and press about consumer’s getting a hold of their own credit and score. Freecreditreport.com, and Myfico.com stress they are FREE!!! They are NOT. Also, when a consumer pulls their own credit they often get what is called a “Vantage” score. These scores range form 501-990.
A FICO score is what mortgage and car dealerships use to rate your credit. A fico score is based form 300-850. The highest score I have ever seen is 836 and many (MOST) perfect credit borrowers do not even approach 800. I have never seen a score under 450. Average US credit score is btw 660-680.
I hope this helps many of you understand why some people who swear they have great credit, actually have average or poor credit. A 720 Vantage score may be under 600 for FICO. Until Fannie Mae or Freddie Mac, as well as FHA and any other sub-prime lending institutions agree across the board to use the Vantage scoring system, the traditional FICO rating will remain in place and consumers will ultimately be confused.
As a quick reminder as well…the only government supported credit reporting company that is truly FREE for consumers is https://www.annualcreditreport.com This is free to see what is in your credit history 1 time every 12 months. You can also dispute errors online and then have a written confirmation of the dispute. If no response by creditor within 30 days, then it is removed from report. You can pay a small fee of no more than $10 to each credit agency through this website to get your credit score. But the report is more to see your credit history and dispute errors individually with each agency.