I got a fabulous consumer question today regarding a lender’s use of an “RMCR” credit report and why lenders won’t use credit reports provided by consumers for risk assessment.
“John, I’m trying to re-finance my home. I pulled my FICO scores from all three agencies, and they range from 744-771 which is great. However, the lender tells me they are using something called an RMCR and that the scores they pulled range from 680 to 721 and that’s not the same as the scores I pulled myself. My question is this…Am I stuck with Lender’s info, or can I argue scores I pulled are valid?
An “RMCR” is a Resident Mortgage Credit Report and it’s what mortgage lenders use when you apply for a loan with them. I’m not sure where you got your scores but there is no way to pull actual FICO credit scores from all three of the credit bureaus unless you’re a lender. You might want to double check to see what “brand” of scores those are.
But, to your question…they’re not going to accept your credit reports and they’re not going to accept your scores. Here’s why…
1. Fraud – It’s way too easy to doctor 3rd party materials, including credit report data and credit scores. I remember several years ago when I was still with FICO I’d help with their credit bureau helpline from time to time and I’d get calls from auto lenders now and then asking me how in the world credit reports loaded with negative information could end up with such good scores. After reviewing a few of them it was obvious that someone at the dealership was changing the scores before submitting the borrower’s application for financing. These were very easy to identify. I’m not going to say how we’d bust them or they’d just change their tactics. Let’s just say it takes about 5 seconds to sniff out a fraudulent score.
2. Automated – For better or worse, we live in a world where credit decisions are largely automated. Most lenders, including mortgage lenders, use sophisticated application processing systems that pull credit reports and credit scores from the credit bureaus, feed that information into their decision models, and then spit out a decision and loan terms. Simply handing over your credit reports and 3 scores that aren’t the same as the lender is using doesn’t allow them to consider your application in the most efficient and logical way possible, to them anyway.
Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, founder of www.creditexpertwitness.com and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. You can follow John on Twitter here.