FICO Report, is it worth it?

17 Replies

Hey everyone,

Going shopping for loans next week. Would you recommend getting the FICO scores offline to go in with? I plan on bringing all the other info (bank statements, w2's, tax returns, etc) as well. 

If you do, is it worth having all 3? Or just one such as only TransU, or only Experian?

What are your thoughts? BTW this is my first home loan, fresh out of college.  

Thanks in advance

It's good to know your score in advance, for your own edification.  The bank will run their own credit check on you, no matter what.

sites like creditkarma will give you a pretty good idea of what your score is.  some credit cards also offer this info as a perk (e.g. discover)

There is One FICO score, the other scores from the bureaus are their own.  Your lender will run their own reports, no need for you to do it.

@Benjamin Ouderkirk

The only site I know of that will give you the same score lenders see is myfico.com

Other sites like credit karma us a different scoring system, pretty useless. I've seen a difference of 100 points in what people thought they had 

Just go to the bank and have them pull it. Knowing in advance doesn't change anything other than to tickle your curiosity.

There are tons of different FICO algorithms based on the lender, and what type of credit you are seeking. Since lenders value certain aspects of your credit more than others you'll find your score changes at each different bank. They should all be pretty close, unless you find a bank that heavily weighs transunion more than the others. That'll usually throw you average off but shouldn't hurt you. 

Originally posted by @Alexander Felice :

Just go to the bank and have them pull it. Knowing in advance doesn't change anything other than to tickle your curiosity.

There are tons of different FICO algorithms based on the lender, and what type of credit you are seeking. Since lenders value certain aspects of your credit more than others you'll find your score changes at each different bank. They should all be pretty close, unless you find a bank that heavily weighs transunion more than the others. That'll usually throw you average off but shouldn't hurt you. 

 ^ This...

Besides the bank isn't going to take your word for it, they will do their own pull. Just so you know checking your own credit will not result in a hard credit inquiry, generally you must apply for a loan or credit to have a hard pull on your credit.

Adam

@Adam Hershman @Alexander Felice  @Wayne Brooks

Thanks everyone - decided to skip it.

First loan approved by a local lender! had to reschedule the other local lender and the conventional banks until the next time I'm home, so I don't have anything to compare this against. 

But! I got approved for 5% down on 350k @ 4% interest with a 728 score! 

Two questions - 

Does it look better to have as high a pre approval as possible? For instance, if I end up buying a 250k property is it okay to have a pre approval letter for 350k or is it better to have one for the exact loan. Just figuring it will take extra time to keep getting approval letters for every property I offer/counter offer on.

Also - how do I know how quick of a closing I can offer as a bargaining tool? Is that a question for the lender I chose to work with? As in, it'd be nice to offer a quick closing in exchange for a price difference, but how do I know what I can guarantee? I believe my lender will be portfolio fyi.

Don't waste your time with pulling it before hand. They bank/cu will pull it regardless. It doesn't hurt to have a rough idea of what you're working with. My Disc. and Amex both give me a monthly "fico". 

Ryan Dossey, Real Estate Agent in IN (#RB15001099)
800-347-9296

@Benjamin Ouderkirk as far as I know, the pre-approval gains you no benefit for negotiating or lending. Meaning, it doesn't matter what you're approved for vs what you buy. As long as the amount you're approved for is close to what you want to buy, your realtor is happy, which is really the only purpose.

I can't really help on your second question but I would advice not to over promise a short closing date if you're using bank financing. You may want to close in a week but underwriting can take WAY longer even with good credit/income/paperwork etc. In a retail deal I don't see this as much of negotiating leverage anyway.

Originally posted by @Benjamin Ouderkirk :

so maybe it's not worth the extra hard pull on my credit to get an exact number, and just use credit karma or something to get an idea?

 doesnt effect your credit if you pull it. only if a lender pulls it. 

kinda  a waste of time for you to pull it? probably. 

This post has been removed.

Originally posted by @Benjamin Ouderkirk :

@Alexander Felice  Thanks for the feedback. I'll just leave it out of the question then and just keep my pre approval letter with me

 Hey Benjamin,

Generally, pre-approval just lets any potential sellers you may encounter know that you are serious. Er at least serious enough for you to work with a lender to receive preliminary approval for a loan that would allow you to purchase a property in their price range.

The only benefit or drawback to an approval amount would be that if you were looking for a house in the $250K range, but found a great deal in the $300k range, a pre-approval for $350K would still let the seller know you could afford it. By the same token, if your pre-approval letter is for $250K, a seller of a $300k property might have concerns about you being approved. 

Basically its all psychological, the only thing a pre-approval does, is convey that a bank would "most likely" approve you for a loan up to that amount. 

Adam

@Adam Hershman

hmmm...might it be smart to get approval letters at varying amounts to tailor them to the property owners? 

Or is that just sorta going overboard, I should just use one that is high (300-350) and explain that I am only going to pay what the property is worth. Even if I could afford 100-200k more house.

Originally posted by @Benjamin Ouderkirk :

@Adam Hershman

hmmm...might it be smart to get approval letters at varying amounts to tailor them to the property owners? 

Or is that just sorta going overboard, I should just use one that is high (300-350) and explain that I am only going to pay what the property is worth. Even if I could afford 100-200k more house.

 Generally the thought process is to get a pre-approval for the highest amount you think you might spend. That will cover you at any price range, and let the seller know you are serious. I don't think there is any reason to get multiple pre-approvals for smaller amounts, there just isn't any benefit.

Adam

I am not a Mortgage Banker/Broker

 

Hey Benjamin, congrats on the pre-qualification.  As for the appoval letter...If you can get a higher one, than get it (if you want that much house).  Or, you can stay with in the price range of the current approval letter and pay the loan off early, saving youself thou$and$ in interest.  You can pay it off early serveral ways:  Make a bigger downpayment, make bi-weekly payments, divid your mortgage by 12 and add that number to the principal each month.  Just make sure your lender DOES NOT have early pay off penalties.  Either way, you have what others don't...OPTIONS!  If any of the info is wrong, please correct me. 

Happy REI'ing.