Where to Find the Credit Score Mortgage Lenders Use

Introduction

When it comes to securing a mortgage, your credit score plays a crucial role in determining your eligibility and the interest rates you'll be offered. Mortgage lenders rely on these numerical representations of your creditworthiness to assess the risk involved in lending you money. However, navigating the world of credit scores can be confusing, especially when you're not sure which one lenders are using. In this article, we'll demystify the process and provide you with practical advice on where to find the credit score mortgage lenders use and how to improve it.

Understanding Credit Scores

Before delving into where to find the specific credit score mortgage lenders use, it's essential to understand the basics of credit scores. Credit scores are three-digit numbers calculated based on your credit report, which contains information about your credit history, payment patterns, and outstanding debts.

There are two main types of credit scores used in the United States:

1. FICO Score: Developed by the Fair Isaac Corporation (FICO), this is the most widely used credit score by lenders, including mortgage lenders. FICO scores range from 300 to 850, with higher scores indicating lower credit risk.

2. VantageScore: Created by the three major credit bureaus (Experian, Equifax, and TransUnion), VantageScore is an alternative credit scoring model that ranges from 300 to 850, similar to FICO scores.

It's important to note that while FICO and VantageScore use different formulas, the general principles for maintaining a good credit score remain the same: pay your bills on time, keep your credit utilization low, and maintain a diverse mix of credit accounts.

The Credit Score Mortgage Lenders Use

Most mortgage lenders use FICO scores when evaluating loan applications. Specifically, they typically rely on the FICO Mortgage Score, which is a specialized version of the FICO score tailored for the mortgage lending industry.

The FICO Mortgage Score is calculated based on the information from your credit reports at the three major credit bureaus: Experian, Equifax, and TransUnion. Lenders will typically consider the middle score of the three or, in some cases, the lower of the two highest scores.

Accessing Your FICO Mortgage Score

While you can find your general FICO score through various credit monitoring services or directly from the credit bureaus, accessing your FICO Mortgage Score requires a bit more effort. Here are a few options to consider:

1. Credit Bureau Reports: You can purchase your FICO Mortgage Score directly from the three major credit bureaus. This option typically comes with a fee, but it provides you with the most accurate and up-to-date information used by mortgage lenders.

2. Mortgage Lender Disclosure: When you apply for a mortgage, the lender is required to disclose the credit score they used in evaluating your application. This gives you an opportunity to see the exact FICO Mortgage Score they considered.

3. Credit Monitoring Services: Some credit monitoring services, such as myFICO and Credit Karma, offer access to your FICO Mortgage Score as part of their paid subscription plans. While convenient, these scores may not be as current as those obtained directly from the credit bureaus.

Improving Your Credit Score

Once you've identified the credit score mortgage lenders use, you can take proactive steps to improve it. Here are some practical tips:

1. Check for Errors: Regularly review your credit reports from all three major bureaus and dispute any inaccuracies or outdated information that could be negatively impacting your score.

2. Pay Bills on Time: Payment history is one of the most significant factors affecting your credit score. Set up automatic payments or reminders to ensure you never miss a due date.

3. Reduce Credit Utilization: Aim to keep your credit card balances below 30% of your total available credit limit. This demonstrates responsible credit management and can positively impact your score.

4. Limit Credit Inquiries: Each time you apply for new credit, a hard inquiry is recorded on your credit report, potentially lowering your score temporarily. Only apply for credit you genuinely need.

5. Maintain a Mix of Credit Types: Having a diverse mix of credit accounts, such as revolving credit (credit cards) and installment loans (auto loans, mortgages), can improve your credit score.

6. Monitor Your Credit: Regularly monitoring your credit score and report can help you identify potential issues and track your progress as you work toward improving your creditworthiness.

Conclusion

Understanding where to find the credit score mortgage lenders use is crucial in preparing for the mortgage application process. By focusing on your FICO Mortgage Score and implementing strategies to improve it, you increase your chances of securing favorable interest rates and loan terms. Remember, building and maintaining good credit takes time and effort, but the rewards of homeownership make it well worth the investment.