Here are some general tips and information to help understand the Credit Reporting process to keep your scores high or to build them.
For mortgage purposes, the industry requires a full Tri-Merge FICO Scoring Report that is pulled by the originating firm through an approved Credit Reporting Agency. The Tri-Merge will show details and credit scores from Equifax, Trans Union and Experian. Every individual has 3 scores – one from each credit bureau. The lender will use the lowest middle score from a view of all borrowers. Example: Borrower 1 has scores of 742, 767, 750. Borrower 2 has scores of 788, 759, 777. The lender will use 750 for pricing and underwriting the loan.
The Fair Issac Corporation is a data analytics company. The FICO scoring model is used across the mortgage industry. The mortgage industry’s FICO model is a more strict and stringent analysis of a variety of factors within a person’s credit history. Your Tri-Merge FICO scores will often be lower than just a standard Consumer Pull of credit that are available to the consumer and generally used in the finance world outside the mortgage industry such as with auto loans, boat loans, your insurance company, etc.
In our world today, when a full credit report is pulled for mortgage purposes, this often triggers the credit Bureaus (Equifax, Trans Union and Experian) to sell leads to sometimes dozens of sources. This results in the consumer receiving random phone calls which can be very frustrating and annoying. To help avoid this, you should consider the following.
You can Opt-Out of pre-screened offers by following the instructions below. It is advised that you first complete the Online Opt-Out that only takes a few days to process. This is good for 5 years. Right after this, you can complete and US mail their permanent opt out election form if you so choose.
The US mailing time that the permanent opt out will take is much longer. So, the Online 5-years Opt-Out is advised at this stage if we are to pull your credit anytime soon.
Here’s a step-by-step guide:
- Online Opt-Out Request:
– Visit the official website (https://www.optoutprescreen.com).
– Select the option to opt out for 5 Years.
– Complete the required fields, including your name, address, date of birth, and Social Security number (optional but recommended for accurate processing).
– Confirm your request by following the instructions on the website.
– Print the confirmation for your records.
- Opting Out by Mail:
– Download the **Permanent Opt-Out Election form** from the same website or use the form available here (https://www.optoutprescreen.com/opt_form.pdf).
– Complete the form with your personal information.
– Mail the completed form to:
Opt-Out Department
P.O. Box 530200
Atlanta, GA 30353-0200
- By Phone:
– You can also call **1-888-5-OPT-OUT** (1-888-567-8688) to submit your opt-out request over the phone.
Please note that it may take a few days for your request to be fully processed.
TIPS:
Closing existing accounts or Opening new accounts within 6-12 months of the report being pulled can have a negative impact on your scores. Balances on credit cards that are more than 25% of the limits will have a negative effect as well – even if you pay them off monthly. Inquiries within the last 12 months (other than consumer pulling their own) can have a negative effect. The higher your scores, the better your rate and loan options will be in most cases. The lender can pull another report up to and including the day of closing. Always ask if you need to make any changes to your credit so we can set up the best outcome for you.