Saturday, October 12, 2019

When is Your Credit Score not Your Credit Score?

Who has monitored their credit on sites like Credit Karma, only to apply for a loan and have the score vary so wildly that you couldn't get financing?  In my time as a mortgage originator, I lost count of how often applicants would say, "But I just checked my score and it was way higher than that!"

My usual response would be that sites like Credit Karma are sort of like Zillow for your credit profile.  The information is a good estimate of what your score and profile are, but lenders don't use that exact formula.  Realtors use a similar line on some disclosures by saying the "information is deemed reliable but not guaranteed."  That was true enough of an explanation when I was on the corporate side of the desk, but I recently applied for my own financing and found out just how hard it can be to navigate what my credit score really is.  I felt like Alice in "Through the Looking Glass," I knew what my credit score was this morning, but it changed a few times since then.

This post will break down what that meant and what happened.  In that order.  Have you ever looked for a recipe online and seen a long soliloquy before the list of ingredients?  "It all started when I took a year off from college to backpack through Italy.  I met a Tuscan grandmother who told me that the secret to a good marinara was patience..."  And here you are thinking, "Damnit, I'm in the checkout aisle at Costco right now and I'm just wondering how to add some zest to the rigatoni.  I don't need to read 'Eat, Pray, Love' first.  Or if I'm being entirely honest here, again."

So I'm switching things up and doing the useful part first and then the story for anyone who's still reading.