Why is a Consumer Credit Score Different from a Mortgage Credit Score?

credit-scores

Scoring models are formulas or algorithms that assigns points based on known information to predict and unknown future outcome.  The Credit Monitoring Services and Nationwide Credit reporting agencies sell credit reports to consumers.  The scores that are sold to consumers are educational credit scores to prepare for loans, managing debts and to check for fraud/identity theft and to ensure information is being reported accurately.

When a Mortgage Lender pulls a credit report, they are using formulas that are based upon historic information in the mortgage industry. The reasons credit scores differ are due to the different models/formulas/algorithms that are being used.  Auto loans use formulas for the auto industry.  Credit cards use formulas for the credit card industry and mortgages use formulas for the mortgage industry.

Here is an article that comes directly from Equifax.  You can now learn more directly from the source.

 

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