How Your Credit Score is Determined for Mortgage Loans

December 25, 2018

Which credit score is used for a mortgage? We’re glad you asked.

It all starts with your FICO score. You may actually have up to three of these – one from each of the major credit bureaus (Equifax, Experian, and Transunion). You might see this used interchangeably with the term “credit score.” Yes, your FICO score is a credit score – but you can technically obtain credit scores elsewhere. FICO just means it’s developed by the Fair Isaac Corporation (FICO). (It’s kind of like calling all tissues “Kleenex.”) Lenders use this because it is a nationally-recognized, reliable source.

Each of your credit scores is based on the information the credit bureau keeps on your file. This includes things like:

  • Payment history (Do you pay your bills on time?)
  • Amounts owed (Do you have a high amount of debt?)
  • Length of credit history (How long have you been an active credit user?)
  • Types of credit used (Credit cards vs. mortgages vs. student loans, etc.)
  • New credit (Did you recently open a new credit card?)

Your three FICO scores will likely be similar, but will ultimately vary slightly since each credit bureau is different. Your score will also change over time based on the changes made to the factors that contribute to your score.

So, which of these FICO scores is used when getting a mortgage? That would be your representative credit score. Lenders obtain this by going through the following steps.

First, they obtain the FICO of each borrower – at least two. If two FICO scores are obtained, they simply use the lower of the two. If three are obtained, they use the middle value. If there is only one borrower, that’s it – that’s the mortgage credit score they use. However, if there are multiple borrowers (a married couple, for instance), lenders will repeat this process for both borrowers and choose the lower of the two outcomes. The final score in the end is your representative credit score.


From there, this score is used to determine a number of factors, such as interest rate and loan eligibility. That said, having a solid credit score is supremely important. There are several ways you can improve or maintain your credit score, such as simply knowing what your credit score actually is or paying your bills on time.

Understanding your representative credit score already puts you in a better position by knowing what to expect when applying for a mortgage loan. Contact a local home loan expert in your area to learn more.

The information provided above is intended for informational purposes only and in no way constitutes legal advice or credit counseling. The Fair Isaac Corporation (FICO) is one of the largest providers of credit score-calculating software.