Personal Finance News
myFICO Adds Mortgage Score Simulator for Premier Members
The Fair Isaac Corporation (much better known as FICO) has officially launched a new feature built for prospective homeowners.
About myFICO’s Mortgage Score Simulator Tool:
This week, FICO revealed the addition of a new mortgage score tool to its myFICO platform. With the FICO Mortgage Score Simulator, users can better prepare to purchase a house by getting a greater understanding of what their credit scores will look like for lenders.
While many Americans often think in terms of a “credit score,” FICO actually employs several different scoring models. Moreover, certain creditor verticals may use specific FICO models. For example, mortgage lenders typically use FICO 2 and FICO 4 scores versus the more popular FICO 8 model.
As FICO explains, using the new Mortgage Score Simulator, myFICO users can experiment to see how different credit actions could impact their mortgage lender credit scores. These actions include paying bills on time, lowering credit card balances, applying for new credit, and more.
Although FICO offers a free version of myFICO, currently, access to the Mortgage Score Simulator is exclusive to the Premier subscription tier. A Premier membership comes at a cost of $39.95 per month. However, this plan also gives customers access to their FICO credit scores and reports from all three major credit bureaus, identity monitoring, up to $1 million identity theft insurance, and more. Meanwhile, the Advanced myFICO membership cost is $29.95 a month and, while it lacks the new mortgage score simulator, it does offer a FICO Score 8 simulator tool.
What They’re Saying:
Discussing the new feature, FICO VP and GM of Consumer Scores Geoff Smith said, “Buying a home is one of the most important financial decisions a consumer will make, and we realize that FICO Scores play a big role in that journey. myFICO’s new simulator gives our customers a window into how potential credit behaviors can influence the credit scores lenders rely on most in mortgage decisioning, empowering people to take proactive steps toward their homeownership goals.”
My Thoughts:
I’m all for consumers gaining greater insights into their credit — and love that the shroud of mystery surrounding mortgage-specific credit scores is also being lifted. That said, $39.95 a month is pretty darn steep for a credit monitoring service when free options, such as Credit Karma (which don’t actually provide FICO scores but, instead, utilize AdvantageScore models) are available.
Also, speaking as someone who bought a house not too long ago, I might recommend that those concerned about preparing their credit for a mortgage application speak with a mortgage broker. In my experience, our broker was able to give us some tips on actions we could take to make it more likely that we’d not only get approved but also secure the best rate possible. Heck, that’s how I learned that the way my Apple Card balance was reporting to bureaus was concerning to lenders. While I can’t say that all mortgage brokers will provide this same level of insight and assistance, I think it’s worth inquiring.
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