What is a FICO Score?
A FICO score is a credit score created by the Fair Isaac Corporation that lenders use to evaluate borrower creditworthiness. Scores range from 300 to 850, with higher scores indicating better creditworthiness. These scores are calculated based on several factors:
- Payment history (35%): Your record of on-time payments
- Amounts owed (30%): Total debt and credit utilization
- Length of credit history (15%): How long accounts have been active
- Credit mix (10%): Variety of credit account types
- New credit (10%): Recent inquiries and new accounts
Different Versions of FICO Scores
Multiple FICO score versions exist, including:
- FICO Score 8: Common for general lending
- FICO Score 9: Includes medical debt and rental history changes
- FICO Score 2, 4, and 5: Used specifically for mortgage lending
Which FICO Score is Used for Mortgages?
Mortgage lenders typically use three specific versions:
- FICO Score 2 (from Experian)
- FICO Score 4 (from TransUnion)
- FICO Score 5 (from Equifax)
These "classic" or "legacy" versions are required by Fannie Mae and Freddie Mac, who purchase most conventional mortgages.
Minimum Score Requirements
| Mortgage Type | Minimum FICO Score |
|---|---|
| Conventional | 620 |
| FHA | 580 |
| VA | No official minimum |
| Jumbo | 680-700 |
How Lenders Use Multiple Scores
Lenders typically use the middle score from the three bureaus. For example:
680 (TransUnion) 695 (Experian) 665 (Equifax)
In this case, 680 would be used for mortgage evaluation.
Why Do Mortgage Lenders Use Older FICO Versions?
- Regulatory Requirements: FHFA mandates these versions for Fannie Mae and Freddie Mac loans
- Consistency: Ensures standardized evaluation over time
- Risk Assessment: Proven effectiveness in predicting default risk
Improving Your Mortgage FICO Score
Payment History
- Make all payments on time
- Set up automatic payments
- Address past-due accounts
Credit Utilization
- Keep credit card balances low
- Avoid opening new credit accounts
- Don't close old credit cards
Length of Credit History
- Maintain older credit accounts
- Keep long-standing credit cards active
How to Check Your Mortgage FICO Score
To check the scores mortgage lenders use, you can:
- Purchase them directly from myFICO.com
- Request them during mortgage pre-approval
- Check if your credit card company provides FICO Score access
For more information on improving your credit score, visit the Consumer Financial Protection Bureau or the Federal Housing Administration website.
Important Considerations
Remember that FICO scores aren't the only factor in mortgage approval. Lenders also consider:
- Debt-to-income ratio
- Employment history
- Down payment amount
- Property appraisal
- Asset reserves
Start monitoring your credit scores 6-12 months before applying for a mortgage to allow time for improvements and corrections to your credit profile.