FICO® reports there are currently 16 distinct versions of the FICO® Score in use by creditors and other authorized users of personal credit data, such as landlords, utility companies and companies performing certain types of pre-employment background checks.
Customers receive access to 28 versions of their FICO Score, which means they can know the most accurate scores before applying for a credit card, auto loan and/or mortgage. FICO offers three programs: Basic, Advanced and Premier.
The most accurate credit scores are the latest versions of the FICO Score and VantageScore credit-scoring models: FICO Score 8 and VantageScore 3.0. It is important to check a reputable, accurate credit score because there are more than 1,000 different types of credit scores floating around.
FICO 9 is similar to FICO 8 but differs when it comes to collections and rent payments. FICO 9 counts medical collections less harshly than other accounts in collections, so a surgery bill in collections will have less of an impact on your credit score than a credit card bill in collections.
What Credit Score Do Lenders Use? The two main companies that produce and maintain credit scoring models are FICO® and VantageScore. Lenders most commonly use the FICO® Score to make lending decisions, and in particular, the FICO® Score 8 is the most popular version for general use.
It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.
The scoring model used in mortgage applications
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage: FICO® Score 2 (Experian) FICO® Score 5 (Equifax)
FICO 8 is still the most widely used FICO credit score today. If you apply for a credit card or personal loan, odds are that the lender will check your FICO 8 scores from one or more of the major credit bureaus.
Consequently, when lenders check your FICO credit score, whether based on credit report data from Equifax, Experian, or TransUnion, they will likely use the FICO 8 scoring model. FICO 8 scores range between 300 and 850. A FICO score of at least 700 is considered a good score.
Some lenders report to all three major credit bureaus, but others report to only one or two. Because of this difference in reporting, each of the three credit bureaus may have slightly different credit report information for you and you may see different scores as a result.
Most lenders in 2021 use FICO 8 scores to determine borrower eligibility. According to Experian, the average consumer FICO score in the US in 2020 was 711—an eight-point increase over 2019. In other words, the average credit score in America is good. “Fair” credit scores on the FICO scale range between 580 and 669.
Is Experian Accurate? Credit scores from the credit bureaus are only as accurate as the information provided to the bureau. Check your credit report to ensure all the information is correct. If it is, your Experian credit scores are accurate.
Re: credit score fico 2 much lower than fico 8
Paying the loan down completely may briefly lower your credit score because you'll have less accounts and less variety of accounts open.
FICO® Scores in the 740 to 799 range are deemed very good. Individuals with scores in this range may qualify for better interest rates from lenders. Good: 670 to 739. FICO® Scores in the range of 670 to 739 are rated good.
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 credit reporting agencies as they evaluate mortgage applications. Mortgage lenders may also use FICO Score 2 or FICO Score 4 in their decisions as well.
FICO Score 9 is already being used by hundreds of lenders, and eight of the nation's top 10 lenders have either evaluated it, are in the process of evaluating it or plan to do so, according to FICO's Lee. He said he expects FICO 9 to overtake FICO 8, but lenders' testing of the new model could take years.
"The 609 loophole is a section of the Fair Credit Reporting Act that says that if something is incorrect on your credit report, you have the right to write a letter disputing it," said Robin Saks Frankel, a personal finance expert with Forbes Advisor.
To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, the type of home loan, loan term, and mortgage rate.
While you don't need a perfect 850 credit score to get the best mortgage rates, there are general credit score requirements you will need to meet in order to take out a mortgage. Prospective home buyers should aim to have credit scores of 760 or greater to qualify for the best interest rates on mortgages.
FHA loans (score: 580)
Most mortgage lenders accept FICO scores of 580 and above for an FHA loan. And you only need 3.5% down to buy a house with this program. Some lenders even allow credit scores of 500-579 under the FHA program, though you'll need a 10% down payment if your score is in that range.