FICO® Score – The Score Lenders Use (2024)

FAQs

Which FICO score do lenders use? ›

While most lenders use the FICO Score 8, mortgage lenders use the following scores: Experian: FICO Score 2, or Fair Isaac Risk Model v2. Equifax: FICO Score 5, or Equifax Beacon 5. TransUnion: FICO Score 4, or TransUnion FICO Risk Score 04.

The FICO® Score is used by lenders to help make accurate, reliable, and fast credit risk decisions across the customer lifecycle. The credit score rank-orders consumers by how likely they are to pay their credit obligations as agreed.

In other words, lenders view a higher FICO^® Score as an indicator of greater creditworthiness. Widely used versions of the standard FICO^® Scores range from 300 to 850, though models tailored to specific borrowers or industries may differ.

90% of top lenders use FICO Scores. So when you apply for a loan, it's likely your lender will be checking your FICO Scores to determine how much you can borrow and how much interest you'll pay.

The primary credit scoring models are FICO® and VantageScore®, and both are equally accurate. Although both are accurate, most lenders are looking at your FICO score when you apply for a loan.

Equifax credit scores are not used by lenders and creditors to assess consumers' creditworthiness. FICO scores are general purpose credit scores developed by the Fair Isaac Corporation, which are used by lenders and creditors to help assess consumers' creditworthiness.

Step 1 – Check with your bank or credit union

If your bank or credit union partners with FICO, log in to your account online. You will likely be provided with a free FICO Score.

Some lenders report to all three major credit agencies, but others report to only one or two. This means a credit agency may be missing information that helps or hurts your score. Scores are from different dates. Since your scores might change at any time, it's important to compare credit scores from the same date.

"For years, there has been a lot of confusion among consumers over which credit scores matter. While there are many types of credit scores, FICO Scores matter the most because the majority of lenders use these scores to decide whether to approve loan applicants and at what interest rates."

FICO score 8 and 9 are commonly used for student loans, personal loans, medical loans, credit card lines and auto loans.

Is FICO 8 or FICO 9 better? ›

Which is better: FICO score 8 or 9? FICO Score 9 is slightly more forgiving than FICO Score 8 since paid-off debt in collections no longer factor in, medical debts are treated differently, and consumers get more help with their credit when their rent payments are reported to the credit bureaus.

You'll typically need a credit score of 620 to finance a home purchase. However, some lenders may offer mortgage loans to borrowers with scores as low as 500. Whether you qualify for a specific loan type also depends on personal factors like your debt-to-income ratio (DTI), loan-to-value ratio (LTV) and income.

The most commonly used FICO Score in the mortgage-lending industry is the FICO Score 5. According to FICO, the majority of lenders pull credit histories from all three major credit reporting agencies as they evaluate mortgage applications. Mortgage lenders may also use FICO Score 2 or FICO Score 4 in their decisions.

If your credit score lands between 300 and 579, it is considered poor and lenders may see you as a risk.

Of the three main credit bureaus (Equifax, Experian, and TransUnion), none is considered better than the others. A lender may rely on a report from one bureau or all three bureaus to make its decisions about approving a loan.

While FICO Score 8 is the most common, mortgage lenders might use FICO Score 2, 4 or 5. Auto lenders often use one of the FICO Auto Scores. And credit card lenders can use the FICO Bankcard Scores.

A true FICO score ranges between 300–850 and gets calculated using only information in a consumer's credit report maintained by the three main credit bureaus— Experian™, Equifax^® and TransUnion^®. To receive a FICO Score, you must have a credit account at least 6 months old and activity during the past 6 months.

For a conventional mortgage in California, you typically need a minimum score of at least 600. If you qualify for certain government-backed loans, however, you may be able to buy a home with a score as low as 500.