Understanding Credit Scores: What Is a Mortgage Score, and How Is It Different from Other Scores?
When applying for a mortgage, lenders use a specific type of credit score known as a mortgage score to assess your ability to repay the loan. Unlike the general credit scores you might see online or in financial apps, mortgage scores follow a unique scoring model that lenders are required to use nationwide.
How Is a Mortgage Score Different from Other Credit Scores?
Credit scoring models vary based on the type of loan you’re applying for. FICO, the most widely used credit scoring system, has multiple models tailored for different financial decisions, including auto loans, credit cards, and personal loans. The mortgage score is specifically designed for home loan approvals, which means it may differ significantly from the score you see elsewhere.
Another competing credit scoring model is VantageScore, but as of now, most mortgage lenders are still required to use FICO models when evaluating borrowers.
Why Does This Matter?
If you’re checking your credit score through an app or website, it’s essential to note which scoring model is being used. The score you see may not be the same one a mortgage lender will use when evaluating your loan application. By understanding your true mortgage score, you can better prepare for the home-buying process with confidence.