When You Apply for a Loan, Why Does Your Credit Score Not Match the One You’ve Monitored?
May 14th, 2019
May 14th, 2019
When you go to apply for a mortgage, you may feel confident about the rates and terms you will be offered based on the credit score you have been monitoring.
Perhaps you have been working steadily towards raising your score for months now, and finally believe that you will qualify for an affordable mortgage on the home of your dreams.
Then the lender checks your score along with your other financial information and comes back with something you did not expect—a different score than the one you believed you had.
What is going on in this situation? Did the lender make a mistake? Was the score you had before inaccurate?
Chances are good that the lender did not make a mistake, and neither did you. To discover how both things are possible, read on.
It is a common misconception among consumers that every person has a single credit score. But you have multiple credit scores.
A credit score is nothing more than a numerical representation of the data in your credit report. To make matters more complicated, you also have more than one of those. Each of the credit bureaus (Equifax, Experian and TransUnion) maintains a separate credit report for you.
While there are several different credit scores available for any given person, the most common two are:
According to FICO, around 90% of lending decisions are based on its scores. But that does mean that a significant number of lenders choose to use other credit scores than your FICO score.
VantageScore is worth mentioning because many consumers track this score for free through Credit Karma.
So, the most common scenario where there might be a discrepancy would be, for example, when a customer has been tracking a score by VantageScore, but a lender is relying on a FICO score instead.
Here are some of the other factors which might result in a discrepancy between the score you have been tracking and score that your lender pulls up:
In short, inconsistencies in credit scores are incredibly common. Indeed, it would be quite unexpected for all of your credit scores to be a perfect match for one another. You also might be surprised by just how big the discrepancies can be.
Now you understand why a lender might pull up a different credit score for you than you have for yourself, and you also have some suggestions for tracking and improving your scores. Good luck, and when possible, give yourself plenty of time for enhancing your borrower profile and applying for a mortgage.
If you need assistance navigating the complex world of consumer credit scores, Grandview Lending is here to help. Please give us a call today at (317) 255-0062 to schedule your consultation.
We provide our clients with exceptional service and integrity which has become our hallmark.