There are a lot of scams out there these days, none that we find as frustrating though as the infamous online credit score! Here we have one of the all-time greatest inventions to rip off the average consumer, why isn’t anybody creating a fuss about such a magnificent scam? The reason is because almost nobody understands how it all works and the powers to be keep it all very hush hush.
How many people have checked their scores lines online at some point? There is no great data on this but we are thinking the majority of everyone has checked their scores online. Now, out of all these millions of people, how many could use these exact scores for lending purposes? We are going to go with 0, give or take. This is due to the fact that online scoring models, even the ones provided by the bureaus themselves, are completely different from the scoring models that lenders use when a loan is being applied for. This makes the average online and the credit bureau’s scoring models completely worthless.
How is this legal you may ask? They don’t claim they are giving a FICO lending approved scores, they are saying is what “we” calculate your score to be, based on our system. Even on the rare occasion if they use a FICO model, there are over 50 of those scoring algorithms created so it’s unlikely to be the one your lender is using. Some of the online scores are so off it seems like a bad joke, like Transunion direct source who is Truecredit, their score range goes from an 501 to a 999 so you easily see yourself with an 800 or 900 but that doesn’t mean it’s worth the paper it’s printed on.
Another laughable aspect about this system is that you notice how a consumer never applies for a loan only to find out that their score is actually much higher than what they recently pulled online. In fact the average online score is roughly 40 points higher than what you see through a lender. The conspiracy theory behind this is that the better score you show someone on average, the more people you will attract to your website through referrals.
What is one to do? I tell you what, Anthony, with NCC happens to specialize in the scoring models and algorithms used by mortgage professionals and lenders. A fun test to give us will be to tell us over the phone which credit provider you are using to pull credit through and we instantly will be able to tell you the exact algorithm models you are using. When securing loans in the credit repair world, understanding exactly how the scores are calculated is most of the battle.
Please use the personal PORTAL LINK created to send information and credit report, making everything easy and secure.
The Team at Scates Realty, has you covered! While you’re at it … if you have questions regarding Down Payment Assistance, Different types of Mortgage loans, Closing Costs Grants or just overall questions about buying a house or renting while you’re building your credit … reach out to us!