Which FICO® Score Do Mortgage Lenders Use?

If you are using a free credit monitoring service and think you know what your credit score is, you might be surprised when you apply for a loan and your mortgage lender comes back with a different set of credit scores. 

This can happen because there are actually many different credit scoring models used by lenders. In fact, there are 16 different FICO Scores with dozens of variations of each score.

Each credit scoring model interprets the information in your credit profile differently, aiming to give lenders the information they need to approve your home loan application. Most mortgage lenders use the FICO Credit Scores 2, 4, or 5 when assessing applicants. 

Mortgage lenders who offer conventional mortgages are required to use a FICO Score when they underwrite your loan application for approval. The specific scores used by each bureau are as follows:

  • Experian: FICO® Score 2, or Experian/Fair Isaac Risk Model v2
  • TransUnion: FICO® Score 4, or TransUnion FICO® Risk Score 04
  • Equifax: FICO® Score 5, or Equifax Beacon 5

Each of these credit scoring models comes from FICO, the company that over 90% of lenders use. It’s important to know which model your lender will use because you might be applying for a loan that has a minimum credit score requirement, like an FHA loan or VA loan.

If you’re applying for that type of loan, you’ll need a mortgage score that meets or exceeds that requirement. Even if your credit score according to another scoring model would qualify, it won’t matter if your score under the lender’s credit scoring system doesn’t meet the requirements.

Why Are There Different FICO Scores?

There are many different FICO scoring models and some credit scoring models that aren’t provided by FICO, such as the VantageScore credit score. 

Each credit score aims to do the same thing: give lenders a quick way to determine a borrower’s creditworthiness. So why are there so many different models?

The simple answer is that each model is designed to help lenders determine the credit risk for different types of debt. An auto lender is making a very different type of loan than a mortgage lender or a credit card provider, so they might want to emphasize different details in your credit report.

For example, if you’re applying for an auto loan, the lender will likely use the FICO Auto Score model, which is designed for people looking for a car loan. There are other scoring models that lenders may use depending on the loan type you’re applying for.

Credit card lenders may use the FICO Bankcard Score, which emphasizes your credit utilization ratio.

The good news is that, in general, the scores you receive under each scoring model will be similar. If you have a higher credit score than most people when using one model, you’ll generally have a good credit score with other models.

However, there are some situations where you can have a different credit score than expected depending on the model used. Each formula weighs things differently, so if you’re on the cusp of qualifying for a loan, it’s important to pay attention to the model the lender uses.

What Else Do The Lenders Look At?

When you apply for a home loan, lenders look at a lot of factors other than your credit history.

One of the most obvious things that lenders look at is your income. If you apply for a $1 million mortgage loan but only make $30,000 a year, the lender is going to know that you have no way to pay the loan back, even if you have perfect credit.

Conversely, someone with a high income may have a better chance of making payments on a $1 million loan, but if they have poor credit it will hurt their chances of qualifying for a loan.

Lenders also look at your debt-to-income ratio, which measures the amount of money you make compared to your monthly bill payments. The lower this ratio, the more money you have available to take on payments for new credit accounts.

If your debt-to-income ratio is too high, it means you don’t have extra room in your budget to handle a new loan payment.

How Your Credit Score Impacts Your APR

Your credit score has a major effect on the APR of your loan. The APR of any installment loan, such as a mortgage, reflects the cost of interest expense and fees over the life of the loan. The higher the APR, the more the borrower will have to pay.

If you apply for a $250,000, 30-year mortgage, you can wind up paying wildly different amounts depending on your credit score, as shown below.

Interest Paid by FICO Score

FICO ScoreAPRMonthly PaymentTotal Interest Paid
Based on the MyFICO Loan Savings Calculator in August 2021

If your credit score is on the lower end, even a small difference in your mortgage score can make a big difference in the cost of your home loan. You could wind up paying more than 20% more each month, which can make it harder to afford a mortgage.

How to Improve Your Credit Score Before Applying for a Mortgage

If you want to buy a home, one of the best things you can do to make the home buying process easier is to improve your FICO score. Regardless of the credit scoring model that your lender ultimately uses, you can take some basic steps to boost your credit score.

Remember that a lower credit score makes it harder to qualify for a loan and affects the interest rate that the bank or credit union will charge. That means that boosting your credit score can make a mortgage cheaper, making it easier to afford homeownership.

There are five factors that comprise your FICO credit score:

Each step you take to improve your credit score will reduce your mortgage interest rate, making it well worth the effort to improve your credit.

Get a Credit Strong Credit Builder Loan

One of the best ways to build payment history is to get a Credit Strong credit builder account. Credit Strong is part of an FDIC insured bank and offers credit builder loans. Credit builder loans are special types of loan accounts that build credit easily.

When you apply for a loan from Credit Strong, you can select the term of the loan and the amount of the monthly payment. Credit Strong does not immediately release the funds to you. Instead, the company places the money in a savings account for you.

As you make your monthly payments, it improves your credit by building your payment history. Credit Strong will report your payments to each credit bureau.

When you finish paying off the loan, Credit Strong will give you access to the savings account it established for you, making the program a sort of forced savings plan that also helps you build credit.

Ultimately, with interest and fees, you’ll pay a bit more for the loan than you’ll get back at the end, but this can still be a solid option for a borrower who wants to improve their credit while building savings.

Unlike some other credit builder loan providers, Credit Strong is highly flexible, letting you choose from a variety of payment plans. You can also cancel your plan at any time so you won’t damage your credit by missing payments if you fall on hard times.

See the credit builder loan pricing and plans here.

Increase Your Available Credit

Another thing lenders look at when assessing a borrower’s creditworthiness is their credit utilization ratio. This ratio compares the borrower’s debt, particularly credit card debt, to their overall credit limits.

For example, if you have one credit card with a $2,000 balance and a $4,000 credit limit, your credit utilization would be 50%. Lenders look for borrowers with lower credit utilization because maxing out credit cards can be a sign of default risk. 

A credit utilization of 30% is good, but less than 10% is better. So if you have a card with a $1,000 credit limit, to optimize your credit score you’ll want no more than $100 outstanding on the statement date for the card. 

That means that one of the easiest ways to boost your credit score is to decrease your credit utilization ratio. You can do this by paying down debt or increasing your credit limits.

If you’ve had a credit card for a while and have built a good payment history, most card issuers will be willing to offer a credit limit increase. You can typically request an increase through your online account.

There’s no risk when requesting a credit limit increase. The worst a lender can do is say no, leaving you exactly where you started. In the best-case scenario, you’ll get a big credit limit increase, dropping your credit utilization ratio and giving your credit score an immediate boost.

Dispute Errors on Your Credit Report

Before applying for a major loan, such as a mortgage, it’s a good idea to take a look at your credit report. If you want to know how to raise your credit score 200 points, finding and removing errors is one of the easiest ways.

You may be surprised to learn how often the credit bureaus make mistakes and put incorrect information on your credit report. Pulling a copy of your report gives you an opportunity to identify these errors and dispute them.

For example, you might find an account that doesn’t belong to you or records of a missed payment that you didn’t actually miss.

Each credit bureau has its own process for letting people dispute errors. If you find a mistake on your credit report, make sure to reach out to the credit bureau to dispute the mistake.

If you can get a missed or late payment removed from your credit report, it can give your credit score a major boost, giving you a better chance of securing a good rate on a mortgage.

Stay Away From Hard Credit Inquiries

When you apply for any conventional loan or credit card, the lender will ask one or more of the credit bureaus for a copy of your credit report. The credit bureau will make a note of this on your credit report as a “hard inquiry.”

Each hard inquiry on your report drops your credit score by a few points. Lots of hard inquiries in a short period of time can really damage your score. This is because a borrower who is applying for a lot of loans in a short period is probably having financial problems.

When you’re thinking about applying for a big loan, especially a mortgage, make sure you try to avoid any unnecessary hard inquiries.

The good news is that most credit scoring models won’t punish you for rate shopping. If you apply for a mortgage from multiple lenders within a short period of time, typically a few weeks, most models will treat all of those applications as a single inquiry.


Your FICO score plays a big role in how much you pay to buy a home. Taking steps to boost your credit score will help you qualify for a better loan and lower your monthly payment.

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