What Credit Score Do Mortgage Lenders Use?
Updated: Apr 20
Ever checked your credit score on Credit Karma and thought you are ready to buy a home, only to find out you weren’t even close?
You might start to think something must be wrong with Credit Karma, but I assure you, there’s not.
In fact, Credit Karma is one of the top companies today, helping Americans control their debt, free of charge.
So if it’s not Credit Karma, what could it possibly be, why is this happening to you, and how often does this happen?
Well, believe it or not, it happens more often than you think because most people don’t realize, mortgage companies use a different credit score model to determine loan approval.
But first, let's discuss the credit score that you see when you use a credit monitoring service.
What credit score do I see?
If you're using a credit monitoring service like Credit Karma, you are looking at your Vantage Score 3.0 credit score, which is the latest version of your Vantage Score.
A Vantage Score is a credit scoring model widely used as a base score to help consumers understand their borrowing power.
The latest version of Vantage Score has been aligned with the latest Fico. Therefore, when you're looking at your Vantage Score on Credit Karma, you are in essence looking at your Fico score.
However, because this is not an industry-based score, you should only use it to get an overview of your borrowing power.
When it comes to making more substantial purchases like a home, it would be in your best interest to view your credit report.
To get your industry-based Fico credit report visit:
Identity IQ , My Score IQ, or My Fico.
Remember, you’re entitled to 1 free credit report a year.
What credit score is my mortgage lender seeing?
Now here’s the kicker, while most financial institutions, lenders, and credit bureaus use the latest version of your Fico score, mortgage lenders don’t, in fact, they use much older versions of your Fico score.
And if that wasn’t enough of a shocker, each bureau uses a different version of that older model.
Experian uses Fico Score 2 or Model v2
Equifax uses Fico Score 5 of Beacon 5
Transunion uses Fico Score 4 or Risk Score 4
Remember, there are about 16 different models of your credit score. So, which factors make up each of these versions?
Believe it or not, the factors that make up all these credit scores are the same. But it’s how these reports are consolidated and used that makes the difference.
When it comes to purchasing a home, lenders need a more in-depth overview of your borrowing habits, that’s where your RMC report comes in.
Your RMC report or Residential Mortgage Credit report is a compilation of these three older versions of Fico consolidated into one large report with its very own score.
Now, this consolidated report contains additional information you won’t find on the credit report you receive, in fact, the only way to see this report is when you apply for a mortgage and you receive it with your closing packet.
This doesn't mean that you're in the dark, as I stated above, this larger report is made up of the 3 smaller reports, so use that information to help you come up with a strategy to improve your credit.
My Fico.com shows you the older versions of Fico scores lenders use to make up your RMC report.
Note: Because this report is so in-depth you will have to pay those collection accounts you’ve been ignoring.
Other Factors to Consider
By now you’re wondering, why all the compiling and mystery?
Consider this, mortgage lenders are about to loan you an enormous amount of money, they also have to abide by the loan program you may be applying for.
If they mess this up, they could be responsible for a huge amount of money going down the drain, so believe me, they are going to be thorough.
Therefore, on top of the compiled credit report, the residential mortgage report will provide additional details like your employment history and your current income.
They will then ask you to provide other financial records, including investment and retirement accounts, recent bank statements for at least 3 months, tax returns, and pay stubs.
If you have anything you need to explain on your credit report, I would have those letters of explanation handy as well, just in case they ask.