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.
Key Points
• Mortgage lenders may review credit scores from Experian®, Equifax®, and TransUnion® for loan applications.
• Lenders also assess income stability, debt-to-income ratio, and assets to evaluate mortgage applications.
• Higher credit scores can lead to more favorable mortgage terms and interest rates.
• To improve credit scores, focus on payment history, credit utilization, recent applications, and derogatory marks.
• Minimum credit score requirements vary by mortgage type, with FHA, conventional, jumbo, USDA, and VA loans having different thresholds.
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 home mortgage loan 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.
Starting in late 2025, there will be new guidelines from Fannie Mae and Freddie Mac requiring that lenders provide newer FICO and VantageScore® credit scores when they sell the mortgages they write to these two government-sponsored companies. This could lead to a significant change in the scores that lenders use, although exactly when that will take place is still an open question.
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).
Bottom line? It might be mind-blowing to hear, but you have multiple credit scores. Complicating matters further, 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.
Questions? Call (888)-541-0398.
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 gross 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. A mortgage calculator 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, which is backed by the Federal Housing Administration, 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.
With a conventional mortgage, your options, terms, and interest rates are often more favorable when you have a good credit score.
Recommended: Home Loan 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. Keeping your credit utilization under 30% is preferred by many lenders. Using most of the credit available to you shows a lender you may be overleveraged and unable to repay your loans.
• 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. Don’t worry about submitting multiple applications to different lenders when you’re shopping for a mortgage; as long as you do this within a brief window of time — say 14 days — this should only be 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 larger down payment or substantial cash reserves. “How much of a down payment do I need?” is one of the many mortgage questions to ask your lender.
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. Take time to practice good credit usage habits before applying for a home loan and you may be rewarded with better rates and terms.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
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.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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 .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOHL-Q125-016