How your credit score affects your mortgage interest rates Until you know what kind of loan you may qualify for, it’s best to understand what your credit score is, and work on improving it (if your score is low) to increase your odds of getting approved. There may also be home loans where you will not be required to provide your credit history or credit score. Some mortgage lenders, such as Fannie Mae or Freddie Mac, use different scoring models. If the scores are different, the company may use the middle one, or the lower-middle one if you are applying for a mortgage with your spouse or partner. When mortgage or home loan companies request your credit reports, the loan company will receive a single document that will outline information from all three credit bureaus, including your FICO scores. Of course, your score is still calculated on the same factors for all FICO scores, which include:ĭifferent scoring models weigh these same factors differently. There are different models because FICO tailors them to help predict how creditworthy you are based on different lending products or industries. TransUnion: FICO Score 4, or TransUnion FICO Risk Score 04.Equifax: FICO Score 5, or Equifax Beacon 5.Experian: FICO Score 2, or Fair Isaac Risk Model v2.While most lenders use the FICO Score 8, mortgage lenders use the following scores: For instance, mortgage lenders tend to use different scoring models than those used for general lending decisions, such as credit cards. It is, by far, the scoring model lenders use most.Īlthough they are all called a FICO score, the credit scoring company that produces FICO created different scoring models for Experian, Equifax, and TransUnion, as well as models for different types of scoring purposes. Lenders will look at your FICO score when reviewing your mortgage application. View Offer What scoring model is used when applying for mortgage applications?
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