Understanding what the MOP rating system is and the ways in which it can severely impact a credit score can play a critical role in the value you offer your clients as a lender. Even if you aren’t a lender and you are reading this, knowing what you are looking at on your own personal credit report can be extremely valuable. Perhaps everything looks black and white on the surface, but when you begin to peel back the layers of the credit report, you can potentially spot several inaccurate ratings scattered throughout.
First and foremost, ‘MOP’ stands for ‘Method of Payment’ or ‘Manner of Payment’ depending on who you are talking to. It is a scale using a combination of letters and numbers. The letters are going to identify the type of account it is for each line item. Here are the four most common letters you will spot:
R – Revolving
I – Installment
O – Other
M – Mortgage
Each letter is paired with a number on a scale that ranges 0-9:
0 – Unrated
1 – Currently on time
2 – 30 not 60 days late
3 – 60 not 90 days late
4 – 90 not 120 days late
5 – 120+ days late
6 – THIS NUMBER DOES NOT EXIST ON THE MOP INDEX SCALE
7 – Bankruptcy
8 – Repossession or Foreclosure
9 – Collection, P & L, or Charge-off
As long as there are 9 ratings attached to accounts, they are hurting scores as much as they ever could. For example, one common inaccuracy we run in to is for folks who have experienced a bankruptcy in their life. A bankruptcy should end up rating at a 7, but often times they are still stuck at a 9 for several months or years. While it is only a 2 point bump in the MOP rating index, it can dramatically impact where your score sits.
My Credit Guy has a team full of experienced, trained eyes on how to properly read through a credit report. One reason loan officers and lenders of all types from across the United States collaborate with My Credit Guy on any/all credit turndowns that come across their desk is because My Credit Guy is designed to deliver maximum results (quality score increases that stick) with the fastest turntimes in the industry. Transparency, quality, and no cutting corners. My Credit Guy is truly in the business of helping clients make their dreams come true and helping loan officers close more loans than they ever have before. My Credit Guy offers free, non-obligatory reviews on all files. Secure upload one of your clients’ credit files today for a free review and experience the My Credit Guy difference. If you’d just like to discuss our process a bit more in-depth first, contact us today and we’d love to meet you!
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