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Tulsa Mortgage : Podcast 41 – Part 1

Tulsa Mortgage Steve: This is stevecurrington.com in The Steve N’ Tyler Show episode number 41.
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Announcer: Welcome to The Steve N’ Tyler Show with stevecurrington.com and Tyler Whyburn.

Tulsa Mortgage Steve: Who negotiated a contract for you?

Tyler: [unintelligible 00:00:15]

Steve: You’re pretty smart. Good for you, man.

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Announcer: They’re talking about everything you need to know about mortgages, home loans, and more. Nobody knows mortgages like these two. Get ready, because here’s Steve and Tyler.

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Steve: What is up? Podcast universe. It’s stevecurrington.com on The Steve N’ Tyler Show. I’m here with Tyler. Hello, Tyler.
Tyler: Hello.
Steve: Hello, Tyler Newman. Hello, Newman, right? You don’t watch Seinfeld?
Tyler: Never.
Steve: Oh my goodness. Guys, we have to stop the podcast right now. We can’t talk about credit scores today. We need to edu — you never watched Seinfeld?
Tyler: I don’t think I’ve ever been able to make it through an entire episode.
Steve: You’re a terrible person. We’ll talk about – listen, I’m going to table that right now, so [laughs] thanks for tuning in to our podcast. Today we’re talking about very basically, very basically, Tyler, what are credit scores? Boom. What are credit scores? I’m going to give you guys a — from the book, what’s the book say? That’s what I was asked. The dealer at the blackjack table; “What’s the book say?” “Hit.” The book says credit scores are numbers that are derived from a consumer’s credit history. The number reflects the various credit details on a consumer’s past. People with higher credit scores get better rates than those with Tulsa Mortgage lower credit scores. A score also attempts to determine the likelihood of default on a loan. The higher the score, the less likely of missed payments.
The lower the score, the greater the credit risk, at least according to the scoring model. Here’s what’s craziest, no one knows. It’s like a Sikh – Okay, here’s what it is. This is the only thing I can compare it to. You know the baked beans commercial? Is it Boston’s baked beans? They had that dog and the dog’s the only one that knows the recipe.
Tyler: Is that Bush’s?
Steve: It’s Bush’s, that’s what it is. Bush’s baked beans. That’s the deal. No one really knows the recipe, the real — We’ve got some general parameters of what is derived in your credit score, but really it’s like the secret Bush’s beans recipe that only the dog knows. Only the credit reporting agencies know. The C.R.As they call them. We have some general stuff and I’ll hit that here in a minute so that – Luckily, you’re talking to a couple guys who are certified FICO professionals. We know credit like most people don’t know credit. You’re going to Tulsa Mortgage, you want to talk to somebody that knows credit like we know credit, because we can advise you whether the score you have is going to get you a better rate, a worse rate, whether it’s going to matter.
There’s a lot of what I would call hocus-pocus out there, Tyler, right? We deal with that every day about things that people have been told about credit scores or about qualifying and all that stuff. We’ll dispel a couple of the rumors that we have today. I’ll let you hit that one. What’s the number one rumor that we get every single day?
Tyler: [unintelligible 00:03:37]
Steve: Okay, let me just ask you, because I know your answer to this. “Hey, great, nice talking to you, Tyler, I’d like to apply, but I already talked to this other lender yesterday, and so is my score going to go down if you pull it?
Tyler: No.
Steve: You don’t have to answer. I want you to elaborate on that in a minute. That’s the question that we get a lot. I’ll let Tyler hit that here in a minute and give you the whole — He gave you the easy ‘no’, but we’ll explain that for you. One of the things that I thought was interesting in some of our research that we did — remember we talked about this last week that they didn’t really get really detailed into credit scores until the ‘90s, which is basically when credit cards got really sexy. Tyler wasn’t even born till the ‘90s; Just kidding. For people that just don’t know, really, if you’re 25 right now, 26, then we’re in 2016 here at this Tulsa Mortgage company. You’re 26. That means you’re maybe born in 1990. That’s when they really started not manually calculating credit scores.
They use a FICO scoring model now called FICO 8. Here’s a little known fact. Did you know that when you apply for credit that you get a different score based on the type of credit that you apply for? Did you know that, Tyler?
Tyler: Mind-blowing.
Steve: Yes, mind-blowing. Here’s the deal. Every type of credit that you apply for has a different risk tolerance. It makes sense. If you’re applying for a credit card, if you’re applying for a car or a mortgage, there’re different risks, right? A mortgage is a pretty heavy risk, so your credit profile and your credit score might actually be lower if you’re applying for a mortgage than it would be if you’re applying for a car. People all the time will call and say, “Well, I got Credit Karma or — What’s this? It says my score is 757 and –” Here’s the deal. Maybe, we’ll see when I pull it, because what happens is when you apply for credit, they put you through the original FICO scoring model and then they dump you into a bucket based on what type of credit you’re applying for.
If you’re applying for a car, then you’re going to go into the auto loan bucket. If you’re applying for personal loan, you go to personal bucket. If you’re applying Tulsa Mortgage for a mortgage, you go into that mortgage bucket. Just be aware of that, that your credit score is going to fluctuate. First of all, it’s going to be typically vastly different from whatever scoring number that you get from any service you pay for monthly. No offense to anybody out there that has credit monitoring or that monitors their credit score. If you’re getting it for free, the score part of it awesome. If you’re paying for the score, don’t. We call it a FAKO score, because it’s based on a scoring model that no one uses anymore. Just be aware of that. We’ll talk about credit scoring and how that happens, and how that affects.
Just remember, every bucket will determine your score and it’s based on the type of credit that you qualify for. Tyler, “Hey I’m ready to apply for a mortgage with you, but I just talked to another guy two days ago, is my score going to drop if I apply with you?”
Tyler: It’s not going to drop. You get a certain timeframe. I think it’s about 30 days to shop for a mortgage. They actually allow you to do that, so anybody that tells you otherwise is just trying to sell you.
Steve: Yes. We call it a sales tactic. “Hey, man, look. Your credit’s perfect, Tyler, but in order for me to get you this really low rate, you’re right on the line. Don’t go get your credit pulled by anybody else, because I don’t want your score to drop.” That’s bull —
Tyler: Punch him in the face