Can anyone please make sense of the Trans Union scoring models for credit reports?
Posted in Credit on 12/28/2008 03:11 pm by admin
LittleMomma asked:
I pulled a credit report and the Trans Union score was 740. Two days later, I had to pull a new report - it was the lender’s decision, not mine - and Trans Union dropped their score nearly 50 points!!! I understand they use different models, but can anyone explain this huge drop? There were absolutely no differences in the two reports.
Both reports were pulled for the sake of a mortgage, not auto financing or anything else.
MARQUIS
I pulled a credit report and the Trans Union score was 740. Two days later, I had to pull a new report - it was the lender’s decision, not mine - and Trans Union dropped their score nearly 50 points!!! I understand they use different models, but can anyone explain this huge drop? There were absolutely no differences in the two reports.
Both reports were pulled for the sake of a mortgage, not auto financing or anything else.
MARQUIS
12/30/2008 at 9:59 am
LOWELL
It is normal to have differences in scores.
There are multiple “formulas” (plural). The purpose of this exercise is not to create a number for the sake of having a number, but to predict reliable customer payments. A formula that predicts whether someone is a good customer for a three-year car loan is not necessarily going to predict a good customer for a thirty-year home mortgage and is not necessarily going to predict a good customer for a month-to-month revolving credit card and is not necessarily going to predict a good customer for an insurance company. So, the CRAs have developed multiple formulas to meet the differing needs of different customers.
12/31/2008 at 2:12 pm
CHESTER
The score possibly reflected a charge to your credit card. If the balance increased, your score went down.
01/01/2009 at 5:11 am
ROYAL
You pulled a consumer credit report (no inquirie).
The mortgage company pulled a tri-merge (all three credit bureaus) and is considered a commercial pull, with an inquirie.
01/03/2009 at 1:58 pm
RONNY
When you pulled the credit report, they used one scoring model, because you’re the customer. The bureaus use different scoring models (not much different) depending on what type of request it is. Honestly, if you had a credit report that was recent in your hands, why would the mortgage company request a new one for you? Anything they wanted to know would have been right there.
When you allowed the mortgage company to pull your credit report, unfortunately that does lower your score slightly. I doubt it would be 50 points, though… chances are, something updated in between the times the reports were pulled, or you had a LOT of bureau checks, or it was mostly the scoring system used..