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#2178765 - 05/18/18 05:38 PM
Credit Score - Relied upon
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Joined: Jul 2016
Posts: 194
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When a loan is run through an AUS, the AUS system will factor in the credit score(s) and history then provide the AUS result. That being said, would we always report a credit score regardless of the outcome of the credit decision? If AUS was run and the loan was denied because of the collateral, would the credit score(s) be reported? I think no because it wasn't relied upon for THAT denial reason/decision. Other opinions are - if we ran an AUS and have a result then how can you not say the credit score was not considered? My argument back would be, we may have considered it in the overall process but it was not relied upon for THAT denial reason (collateral).
Thoughts??
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#2178767 - 05/18/18 05:42 PM
Re: Credit Score - Relied upon
BA13
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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My argument back would be, we may have considered it in the overall process but it was not relied upon for THAT denial reason (collateral).
Read the Commentary to 1003.4(a)(15) - 1. Credit score—relied on
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2179332 - 05/23/18 04:15 PM
Re: Credit Score - Relied upon
BA13
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100 Club
Joined: Jul 2017
Posts: 229
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We have 2 applicants. We use the lowest middle score of the applicants for scoring purposes. If I am reading the FIG, the commentary, and overview reference chart, we are only to report (or in compliance) that number and place it under which applicant the credit score falls under. Applicant 1 has an 808 score. Applicant 2 has a 706 score. We report NA for applicant 1 and 706 for applicant 2. Am I reading this correctly. Right now my system spit out both middle credit scores of each applicant. Any help would be appreciated. Thank you.
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#2179351 - 05/23/18 04:48 PM
Re: Credit Score - Relied upon
BA13
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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Your analysis is correct. You only report the score used in making the credit decision.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2179951 - 05/29/18 01:52 PM
Re: Credit Score - Relied upon
Dan Persfull
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Joined: Aug 2015
Posts: 156
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We use the same scoring technique. To further clarify, for the scoring model used, do we report the credit bureau that provided the score we are using in our decision? Or would we report "multiple scoring methods used" since we pulled all 3 bureaus and used the lesser of the middle scores?
Any guidance is much appreciated!
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#2179955 - 05/29/18 02:08 PM
Re: Credit Score - Relied upon
BA13
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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Credit score—multiple credit scores. When a financial institution obtains or creates two or more credit scores for a single applicant or borrower but relies on only one score in making the credit decision (for example, by relying on the lowest, highest, most recent, or average of all of the scores), the financial institution complies with §1003.4(a)(15) by reporting that credit score and information about the scoring model used.
If the score used was generated by Equifax Beacon 5.0 then that is what you report.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2205146 - 02/05/19 08:26 PM
Re: Credit Score - Relied upon
BA13
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Diamond Poster
Joined: May 2013
Posts: 1,069
Compliance Land
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Reading this thread and wondering if there are more recent thoughts. We use the low mid score of all borrowers to underwrite. Example
Borrower scores are 810, 805, 809 Co-Borrower scores are 798, 779, 781
We have been reporting 781 in the applicant field and NA in the co-applicant field based on what we had interpreted and from other opinions on this site. Dan's opinion above seems to say we should report NA for applicant and 781 for the co-applicant. Which is correct or are both acceptable?
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#2205153 - 02/05/19 09:37 PM
Re: Credit Score - Relied upon
BA13
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Platinum Poster
Joined: Jan 2017
Posts: 570
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3. Credit score - multiple applicants or borrowers. In a transaction involving two or more applicants or borrowers for whom the financial institution obtains or creates a single credit score and relies on that credit score in making the credit decision for the transaction, the institution complies with § 1003.4(a)(15) by reporting that credit score for the applicant and reporting that the requirement is not applicable for the first co-applicant or, at the financial institution's discretion, by reporting that credit score for the first co-applicant and reporting that the requirement is not applicable for the applicant.
I think either way works.
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#2221981 - 09/20/19 03:07 PM
Re: Credit Score - Relied upon
BA13
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Diamond Poster
Joined: May 2013
Posts: 1,069
Compliance Land
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Any updated thoughts on this? We have opted to continue reporting the lower of the two scores in the applicant field even if it was the co-applicant's score. My co-worker just attended a seminar and the presenter said she has seen bank's get cited for not putting the score in the specific field for that applicant. She didn't say which regulator it was.
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#2221983 - 09/20/19 03:18 PM
Re: Credit Score - Relied upon
BA13
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Platinum Poster
Joined: Jan 2017
Posts: 570
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Of all the problems with the 2018 data, they're throwing out citations for things that are specifically allowed for in the commentary?
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#2221989 - 09/20/19 03:45 PM
Re: Credit Score - Relied upon
BA13
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Diamond Poster
Joined: May 2013
Posts: 1,069
Compliance Land
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Sounds like it! I looked again at the commentary and it clearly says (to me anyway) that either way is fine.
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#2241049 - 08/14/20 01:07 PM
Re: Credit Score - Relied upon
BA13
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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Bringing this up again. We have an originated portfolio loan with three applicants. The credit score used was for the third applicant - so my question is - do we put the equivalent of N/A for the HMDA LAR using the first two applicants; or do we use the 'third' applicant as the co-borrower on the HMDA LAR? While I haven't asked specifically, I'm 'assuming' the first two borrowers are a married couple and the third borrower is more than likely a parent of one of them.
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#2241051 - 08/14/20 01:15 PM
Re: Credit Score - Relied upon
BA13
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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I believe this says that you would move the third applicant up into the co-applicant position because you relied on their credit score.
3. Credit score—multiple applicants or borrowers. In a transaction involving two or more applicants or borrowers for whom the financial institution obtains or creates a single credit score and relies on that credit score in making the credit decision for the transaction, the institution complies with § 1003.4(a)(15) by reporting that credit score for the applicant and reporting that the requirement is not applicable for the first co-applicant or, at the financial institution's discretion, by reporting that credit score for the first co-applicant and reporting that the requirement is not applicable for the applicant. Otherwise, a financial institution complies with § 1003.4(a)(15) by reporting a credit score for the applicant that it relied on in making the credit decision, if any, and a credit score for the first co-applicant that it relied on in making the credit decision, if any.
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#2241052 - 08/14/20 01:27 PM
Re: Credit Score - Relied upon
BA13
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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Thanks for your quick reply, Randy!
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