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.

You Have More Than One Credit Score

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:

• FICO
• VantageScore

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:

• The source of the score (i.e. VantageScore or FICO).
• The version of the score being used.
• Changes in the data in your credit report from moment to moment.
• Timing discrepancies.

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.

The best way to prepared for scenarios such as this is to:

• Consider tracking more than one of your credit scores if you can afford it.
• Familiarize yourself with your credit report data and submit corrections if required.
• Learn more about what goes into calculating the different credit scores (see Credit Score Monitoring: FICO vs. VantageScore) so that you can work on improving all factors which might influence your scores.
• Try to find out what credit scores lenders in your area tend to use.
• If you are going to pick just one score to monitor, make it your FICO score, as this is the one which is most commonly used nationwide.

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.