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Which credit score does a mortgage lender use?
Fannie Mae and Freddie Mac use their FICO scores to determine the eligibility of the loans that make up most mortgages. Mortgage lenders have traditionally used three different FICO scores to determine their credit score. they are:
- FICO score 2 (Experian)
- FICO score 4 (Equifax)
- FICO score 5 (Trans Union)
Lenders usually get a combined report of these scores. This is known as the Tri-Merge report, which contains details for all three reports. The lender then uses the score to land in the centre to make a loan decision.
Small differences between FICO versions
FICO score versions 2, 4, and 5 are different iterations of similar expressions. Since its introduction, these different scoring models have been updated by their respective credit reporting companies (Experian, Equifax, Transunion). According to Ted Rothman, senior industry analyst at Bankrate, they had many differences due to regionality, but now they are more exchangeable.
While newer versions of FICO scores have been introduced, the mortgage industry is heavily dependent on these older versions due to regulations.
compare: Today’s 30-year mortgage rate
What factors affect your FICO score?
Each FICO score model arrives at a score according to a similar equation. Here are the different factors and how they structure your score:
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Payment history (35%): The biggest part of your credit score is how you manage your debt payments. A long history of reliable and on-time payments will result in a much higher score. If payments are late, delinquent, or there is foreclosure in the report, your score will drop.
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Payment amount (30%): The amount of liability associated with the total amount of credit available is known as credit utilization. The higher the debt ratio, the lower the credit score.
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Credit history length (15%): The age of open and closed account factors is scored, with older accounts positive.
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Credit Mix (10%): The composition of debt and credit type also affects your score. Generally, lenders are looking for installment loans like car loans, student loans, and mortgages, as well as lenders looking for a credit line.
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New Credits (10%): If the lender confirms that he has applied for multiple credit lines in a short period of time, the score will sound. However, this does not apply if you are shopping for a mortgage or car loan. As long as you are Applies to multiple lenders Within 45 days, applications will be grouped as a single inquiry.
Do all mortgage lenders rate the same score?
To make a loan, the mortgage lender will rate the same FICO score. Government sponsored companies (GSEs) Fannie Mae and Freddie Mac require that all lenders who sell mortgages use the same FICO model.
The lender takes these three scores and uses the numbers that fall in the middle to make the credit decision. If two of the three scores are the same, the matching score is the score used.
example
Suppose you apply for a mortgage, and the lender performs a hard credit pull and gets a Tri-Merge report. In this report, they have your score:
- FICO score 2 (Experian): 679
- FICO score 4 (Equifax): 683
- FICO Score 5 (Trans Union): 694
Of these, 683 are the scores used to determine your eligibility and the scores used to calculate your interest rate.
What credit score do I need to get a mortgage?
- Traditional loans: Minimum 620
- FHA Loan: It’s down to 10% at a minimum of 500%. 580 is less than 10%
- VA Loan: Most lenders require a minimum score of 620, but some may be less
- USDA Loan: Most lenders require a minimum score of 640, but some may be less
- Jumbo Loan: Usually there are at least 700 people, but some lenders may be as low as 680.
learn more: Which credit score do you need to buy a house?
Next Step: How to Improve Your Credit Score to Get a Mortgage
Before applying for a mortgage, check your credit report and score for errors such as incorrect late payments and closed accounts. If you find an error, please contact the department to object and correct it. Addressing these mistakes can significantly improve your credit score.
You also need to make sure you are practicing good financial hygiene by paying all your bills on time and reducing the credit card balance you may have. Many lenders also need some form of cash reserve – usually a few months’ payments – make sure you’re spending money to explain this.
Finally, don’t open a new account or take on a large amount of debt before getting a mortgage. For example, applying for a new credit card or taking out a car loan can affect your credit score.
learn more: Best Mortgage Lenders for Bad Credits in 2025
