ARE YOU FUNDABLE, OR DO YOU JUST HAVE A GOOD SCORE? MERRILL CHANDLER
So while you have been trained by the financial world to be score sensitive, no one has taught you the difference between FICO ® and FAKEO™ scores. If it does not have the FICO ® registered trademark it is not a legitimate score— NO lender will lend on it. I hate( not really— just being polite) to inform all of you that the credit scores offered on sites like CreditKarma. com, etc. are FAKEO™ scores and are not used by lenders to extend you credit. The best place to acquire your true FICO ® credit scores is myFICO. com. It offers both unweighted and industryspecific scores. Another feature to the credit report you get from myFICO. com is that it also contains credit scores calculated using various versions of the FICO ® scoring software so that you can see what the lenders see— regardless of which software version a lender uses.
Whaaaaa?
As with all software, there are versions that are more recent and and there are versions that are older. The challenge is that when you go to a lender and submit an application, you do not know what version of the FICO ® software they are using. To add insult to injury, when you pull your myFICO ®. com credit report, you will see that there can be as much as a 20 to 70 point difference between scores generated by the different software versions. And each version grades the exact same data on your credit profile!
What’ s more disturbing still is that lenders do not educate borrowers about the complexities of credit so that they can make intelligent borrowing decisions. Of course, we are not schooled in these credit vagaries. We are told only to pay our bills and we’ ll have a good credit score. The secret is that“ paying your bills” on time is only one of 40 activities on your credit profile that FICO ® measures. Once again, our ignorance of those other 39 criteria leaves us in mystery as to how to positively affect our fundability and our credit approvals.
The second contributing factor to your fundability is the quality of your credit profile. Your credit profile breaks down into five distinct areas: your identity, your revolving accounts portfolio, your installment loans portfolio, inquiries, and derogatory or negative indicators( late pays, collections, liens, judgments, and other types of score limiting data). Let ' s take these one at a time.