Good morning. It’s Tom Heath with the Heath Team at NOVA Home Loans. Today is January 11th, 2021, and this is our weekly update on Mortgage and Real Estate Related matters.
As we enter into the new year, I want to do a little refresher on credit scores. This is something that we run into periodically where consumer believes their credit scores are different than what we have been able to retrieve on our end.
The credit scoring process is a little bit convoluted and there are several different credit scoring models. Some people get them through their credit card or they get it through certain websites or through certain services or through Identity Theft Protection monitoring services. All of those scores are valid for the purpose for which they were pulled, but none of those use the mortgage formula.
Fannie Mae, Freddie Mac. FHA, VA – they dictate which credit formula needs to be used when sending a loan through their program and those formulas can only be used by the mortgage lender. So it’s common for someone to have gotten their credit score through a different source, maybe buying a car or checking it on their own, and then finding out that our score is different.
Sometimes it’s higher, sometimes it’s lower, most of the time it is different simply because the mortgage formula evaluates the the data differently. Your lender is not creating your mortgage score, rather your lender is receiving your mortgage score from each of the three credit bureaus; Equifax, Experian, and Transunion.
So when you run in those situations where your client is a little concerned that the credit scores vary, they should talk to their loan officer to have that explained. Well, I hope you have a fantastic 2021. I hope it is off to a great start. If there’s ever anything we can answer for you, don’t hesitate to reach out. Always head over to our website TheHeathTeam.com for more information and our past weekly updates. Have a great week and we’ll talk to you next Monday!
Tom Heath Senior Loan Officer The Heath Team of NOVA® Home LoansTom@TheHeathTeam.com520.495.72136893 N Oracle Rd #121Tucson AZ 85704NMLS#182420NOVA NMLS 3087BK#0902429Equal Housing Opportunity