FICO Scores

When you apply for a mortgage loan, your credit score (also known as your FICO score) will have an impact on whether you will be approved for a loan, and if approved, what interest rate you will be charged. Your FICO score identifies your history of paying debts on time, your ability to manage various levels of credit and debt, and informs lenders how much debt you already have. Based on your income, those debt levels will help a lender determine if they believe that you will be able to take on the expense of a mortgage payment each month.

Here at CityWorth Mortgage, although we do base loan approval in part on your FICO score, we also know that you are more than just a number and more than just your FICO score. We specialize in helping individuals with scores as low as 620 get into great homes, and you can get pre-approval anytime, anywhere with our online pre-approval application! We set the standard for mortgage lending, and we look forward to getting you into the home of your dreams today.

What is a FICO score?

Your credit score, or FICO score, is a numerical score ranging between 300 and 850. Generally, the higher your score, the lower your loan interest rates will be, including on a mortgage loan. The three credit agencies, TransUnion, Equifax, and Experian, calculate and determine credit scores based on information that your credit card companies and current lenders supply to them. Credit scoring can vary between the three agencies, as some lenders will report to all agencies and some will only report to 1 or 2. Your credit or FICO score is based on your payment history, overall length of your credit history, and several other factors. Having delinquent payments can make a significant impact on your score and can last on your credit report for up to 7 years.

Will lenders use all 3 FICO scores for mortgage approval? If not, which one(s)?

Because the scores can vary between the three credit reporting agencies, generally lenders will use a blended score, also called a “tri-merge” or “tri-bureau” report provided by a third-party provider. Most lenders will use the middle of your 3 scores for mortgage approval. The Fair Isaac Corp., which owns the formula used to calculate FICO scores, can provide mortgage lenders with a special FICO score known as a FICO Mortgage Score. This specialized FICO score can give mortgage lenders a better glimpse into how likely you are to repay a mortgage loan.