Which Credit Score Do Mortgage Lenders Use? All You Need to Know

By Alene Laney · March 06, 2023 · 7 minute read

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Which Credit Score Do Mortgage Lenders Use? All You Need to Know

If you’re applying for a mortgage, you’ll want to know what credit score mortgage lenders use when they’re looking at your credit. It’s more complex than it sounds.

More than 90% of mortgage lenders use scores generated by FICO® models — but each of the three major credit reporting agencies uses a different version of the FICO software.

How Mortgage Credit Scores Work

When you apply for a mortgage and your credit is pulled, the lender will see scores from credit reporting agencies Experian, Equifax, and Transunion.

Which FICO score do mortgage lenders use? The middle number. If two of the three scores are the same, lenders will use that number.

If you’re applying for a mortgage with another person, the lender typically will look at the middle score of both parties and use the lower of the two. Fannie Mae calls for things to be done differently: Lenders of conventional conforming loans are to average the middle credit scores of all applicants.

Experian uses FICO Score 2, Equifax uses FICO Score 5, and Transunion uses FICO Score 4. If your middle credit score comes from Equifax, then your credit will have been scored on FICO Score 5. If your middle score comes from Transunion, your credit will have been evaluated using FICO Score 4, and so on.

Most mortgage lenders only consider FICO scores, but some also will look at a VantageScore® typically gleaned from one of the two latest scoring models.

Both FICO and VantageScore calculate credit scores in a range between 300 to 850, and both put the most weight on payment history and credit utilization (the amount of credit a cardholder is using compared with the person’s credit limits).

It might be mind-blowing to hear, but you have multiple credit scores.

And the scores you see on a credit card statement or in your credit monitoring app are likely higher than the score your lender will see.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Commonly Used Scoring Model in Mortgage Applications

Why do the three credit reporting agencies each use a different FICO scoring model for mortgages?

FICO designed the different versions specifically for each credit bureau because of the way the credit bureaus store and report information in a credit report. These legacy models have been used for years because until recently they were required by Fannie Mae and Freddie Mac for conventional conforming loans.

Despite each credit bureau using a different scoring model, the scores generated should be the same or similar.

Recommended: What Credit Score Is Needed to Buy a House?

Other Factors Mortgage Lenders Consider to Determine Mortgage Terms

Beyond knowing which credit score is used to buy a house, you may also want to know what other factors mortgage lenders consider when deciding whether or not to offer mortgage preapproval on your way to a loan.

Mortgage lenders also consider the following:

•  Steady income. Stable employment is one of the key indicators of a low-risk borrower who is able to repay the loan.

•  A low amount of debt. Lenders look at how much debt you have relative to your income. This is also called your debt-to-income ratio. If you have too much debt, you may not qualify for a new mortgage.

•  Assets. Though not as important as your income or debt, lenders will also look for high-value assets. This includes cash in your checking and savings accounts, investments, retirement accounts, and other property. Assets help a borrower appear less risky to a lender since the money could be used for a large down payment or to cover monthly expenses.

•  Down payment. Your down payment will affect your loan-to-value ratio, which will also affect your interest rate. With a higher down payment, the risk to the lender decreases, which is why you’ll pay a lower interest rate. This calculator for mortgages can help you find a mortgage amount that may work for your situation.

How Your Credit Score Affects Your Interest Rates

Simply put, a better credit score gives you a better interest rate on most mortgages.

An FHA loan is an outlier: Your rate and mortgage insurance premium will be the same no matter what your FICO score is. FHA loans are especially popular with first-time homebuyers in part because of the lenient credit score requirements.

Your options, terms, and interest rates are often more favorable when you have a good credit score.

Recommended: Stop by the Mortgage Help Center

What Factors Go Into a Credit Score?

Improving your credit score before you apply for a mortgage could pay off. It’s helpful to know what to work on that could help you.

•  Payment history. Paying on time every time may be the single most important thing you can do to improve your credit score. It shows that you’re a reliable borrower.

•  Credit utilization. Using most of the credit available to you shows a lender you may be overleveraged and unable to repay your loans. Keeping your credit utilization under 30% is preferred by many lenders.

•  Recent applications. Applying for a lot of credit in a short amount of time can be seen as risky by a lender. It may be wise to limit credit applications leading up to your mortgage application. However, this is different from shopping for a mortgage, when your application at different lenders within 14 or 45 days, depending on the scoring model used, is only considered one hard pull. (Also, be sure not to open any new lines of credit while your mortgage is being processed.)

•  Derogatory marks. A bankruptcy, delinquent account, judgment, charge-off, or accounts in collections are looked upon negatively. It may be best to take care of any issues on your credit report before applying for a mortgage.

Free credit reports are available from annualcreditreport.com. If you find an error, contact the business that issued the account or the credit reporting agency that issued the report. The Consumer Financial Protection Bureau also will assist with complaints.

What Is a Good Credit Score to Buy a House?

To qualify for the best rates on a conventional mortgage, aim for a score above 740. Higher scores reflect a lower credit risk, which is usually rewarded by lenders with more favorable terms.

Can you buy a house with a bad credit score? Possibly. Someone with a credit score as low as 500 (a “poor” FICO score) may qualify for an FHA loan or, with sufficient residual income, a VA loan.

Minimum Credit Score Required by Mortgage Loan Type

Different mortgage types have different minimum score requirements.

•  FHA: 500 if you can put down 10%. 580 if you want to put down 3.5%.

•  Conventional: 620

•  Jumbo loan: 700

•  USDA: No minimum, but scores above 640 are most successful with lenders

•  VA: No minimum, but it is advisable to have a score above 620

A lower credit score may be offset by compensating factors like a 20% down payment or substantial cash reserves.

The Takeaway

Your credit score is the key to unlocking great rates and terms from the lender of your choice. Knowing which credit score is used for a mortgage is a great first step to getting mortgage terms that can work for you.

If you need a home mortgage loan, getting a mortgage with SoFi could be a great option. SoFi has a range of mortgages with competitive rates, flexible terms, and low down payment options.

A mortgage loan officer can answer your mortgage questions and help you find a loan for your unique situation.

Look at the SoFi mortgage menu and then get a quick rate quote.


What does “A” credit mean?

“A” credit is the grade equivalent of a credit score. It’s also called a credit rating and can be assigned to individuals, businesses, or even governments, though it’s usually reserved for . higher credit scores. Credit ratings can range from AAA to a C or D, with AAA being excellent. Credit with an “A” grade represents a desirable borrower.

Which FICO score do mortgage lenders use?

Of the three FICO credit scores pulled from the three credit bureaus, lenders will home in on the middle number.

Can I get a home loan with bad credit?

There are options for borrowers with poor credit. FHA, for example, backs loans with 10% down when a borrower’s credit score is between 500 and 579. Borrowers with scores of 580 and above are eligible to put 3.5% down on FHA loans.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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