Why your credit score isnt really your credit score

Recently I spoke with a woman that was very frustrated and felt overwhelmed. This woman, let’s call her Sharon. Sharon had been working on building her credit for the last 6 months. Sharon had hired a credit repair service and was very careful to check on their progress each month. On the surface, it seemed like all of her hard work had paid off. Sharon’s score had risen from 505 (Ouch!) to a very healthy 642! She had 17 items removed off of her credit and felt that she was now ready to go after the purchase of a home.

Sharon proudly contacted her lender and setup to meet and complete her application for a home loan. After the initial consultation, Sharon was shocked to find out that her lender had denied her application because of her credit score being too low. Sharon was confused, she had been very diligent and keeping up with her credit score and knew that she was more than qualified as far as her credit score.

Sharon sat down with her lender and listened as he explained that lenders typically use a different credit scoring model from the one that you are able to see when you go online and look at your credit score. Lenders have access to a scoring system known as Vantage score. Vantage scores differently for the scoring model that you and I normally see which is the FICO scoring system. The Vantage scoring system is only a few years old but it has been widely accepted by many lenders as the preferred way to look at an applicant’s credit score.

If your interested in some history, the Vantage scoring system was created by the 3 large credit bureaus (Equifax, Experian, and TransUnion) it was made to replace the FICO (Fair Isaac Croporation) scoring system. Now the funny thing is that the credit bureaus created the Vantage score scoring system however they only allow lenders to see the score provided by the Vantage scoring system. Consumers typically still see FICO scoring model or a different variation of the Vantage scoring model when they pull their report from the bureaus.

So How Do You Deal With This?

So if you are trying to get your numbers to where they need to be and can’t figure out what your real score is what do you do? My advice is to not focus on the numbers of your credit score but to focus on the content. Spend your time removing negative items and working thru a credit building program. You won’t be able to see your lender score. However, if you remove negative items and build credit then you will make your credit strong which will give you a good score. When I worked with Sharon in a counseling session, I found out that although she had removed 17 items she had only 1 current account and it carried a high balance.

After 2 months of credit building work including secured cards, secured bank loans, and credit line negotiation, Sharon was able to go back and qualify for her loan with ease. By learning the full credit repair process she found success.

Hope this helps someone. If you have questions or comments, leave them below and I will respond.

If you have questions or comments, leave them below and I will respond.

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