That credit pull dropped my score 40 points: HELP!
I think over my years of helping people while they are getting a mortgage, one of the most frequent moments of panic happens when either I order a credit report or another lender has, and the resulting score is very different than expected. I was the worst case scenario, personally- when I purchased my home, my score was a full 100 points lower than my credit monitoring service was telling me, and I had to sit down right in the middle of a TJ Maxx when I found out to pull myself together.
The first piece of information that most people don’t know is that you do not have just one, or even just three credit scores. There are three credit reporting agencies in the US: Experian, Equifax, and TransUnion. Not all accounts will report to all three credit bureaus, so the information may vary between the three. Each of those credit bureaus will offer both a FICO score or a Vantage score model, which are scoring algorithms designed to evaluate the content of the credit report and translate that information into a number that predicts credit risk based on the available history. Vantage scores are not used for mortgages, but they are most commonly the ones you will see via credit monitoring services. Because these models evaluate the information differently, they can look at the same data and deliver different results.
For FICO scores, there are 14 different scoring models available, ( Link to: https://www.myfico.com/credit-education/credit-scores/fico-score-versions) depending on which one the lender requests when ordering the credit report. These models are adjusted to reflect what best predicts repayment of certain types of debt: your credit card score is intended to tell a card issuer what your risk is for their type of credit, and your auto score will do the same to the auto lender, and so on. You can think of it as having three coaches of three sports evaluating the same athlete: the swim coach may see someone and say “no way, not going to work for me” while the wrestling coach sees the same information and says “come over here, for what we are doing, you’re going to be a star!”
Mortgages specifically use older scoring models that are not going to report on any consumer facing credit monitoring except for the paid experian service which has the option to show all your scores. Because mortgage underwriting isn’t just determined via the creditors extending the credit, but instead is established by government sponsored entities designed to facilitate those mortgages to be resold in pools to investors, the wheels of change in mortgage banking move slowly.
So, to recap: you have around 45 different credit scores, depending on who is asking and what they’re asking for, 15 at each credit bureau which will translate the information differently into a score. Each credit bureau may have slightly different information. Much like if your weight at the doctor’s office is different than it was at home last time you checked, the difference in that number is most likely not because the measurement tool changed the data, but more that the measurement tools are different or the information changed from one measurement to the other.
The Federal Housing Finance Agency, which is the regulator that broadly implements major changes in mortgages, is currently in the process of updating the credit scores to be used in mortgage underwriting, which is expected to roll out in the 4th quarter of 2025.
