Which Mortgage Lenders Use Fico 8

For over 25 years, a variety of lenders have used FICO® Scores to help them make better credit-granting decisions. The FICO® Score model has been updated over time to reflect changes in consumer behavior as well as lenders’ changing needs. As a result, in addition to the most popular version, FICO® Score 8, there are other FICO® Score versions available.

The FICO®Score products on myFICO also include additional FICO® Score iterations, such as previous base FICO® Score iterations and industry-specific auto and bankcard versions. com.

Part 1: Base FICO® Score versions and updates

The fact that the FICO® Score model is periodically updated and a new FICO® Score version is consequently released to the market every few years is one factor contributing to the existence of multiple FICO® Score versions. Lenders frequently use FICO® Score 8, which is the most recent version.

Why are there multiple FICO® Score versions?

Since lenders began using FICO® Scores more than 25 years ago, they have established themselves as the most well-known and frequently used credit scores in the industry. But a lot has changed since 1989, when lenders first began utilizing FICO® Scores. Consumer demand for credit, data reporting procedures, lender credit-granting standards, and consumer credit use have all changed.

To keep up with the evolving credit landscape, FICO has repeatedly updated its scoring formula, ensuring that it continues to be a clear indicator of credit risk. To maintain swift and equitable lending for both lenders and consumers, FICO® Score models are updated. When we update our model, we ensure that the score incorporates the most recent analytical technology, accounts for recent improvements in data reporting, and reflects changing consumer credit behavior.

When a new version of the FICO® Score is created, we make it available on the market. From there, each lender chooses whether to upgrade and when to do so. While some lenders upgrade quickly, others might take several years. This is the reason why some lenders are currently utilizing various FICO® Score iterations. As an illustration, FICO® Score 5 at Equifax, which predates FICO® Score 8 at Equifax,

It can be helpful to consider the various computer operating systems that people use or the various generations of smartphones. Although they all share the same core functionality, the most recent iterations also come with special updated features to address changing user needs.

The same goes for FICO® Scores. The various score versions currently in use all have a common fundamental structure that effectively separates high risk credit users from low risk ones. However, with each score update, distinctive features are added that make use of new risk prediction technology and more accurately reflect current consumer credit behavior. The outcome is a more accurate score that aids lenders in making more knowledgeable lending decisions, which ultimately makes the credit application process simpler, quicker, and more equitable for you.

FICO® Score 9—the newest FICO Score version—is the most predictive FICO Score to date

Many lenders have already upgraded to FICO®Score 9 or are in the process of doing so. It is the most predictive FICO Score we have ever created, and it is our newest FICO® Score version.

  • Third-party collections that have been paid off no longer have a negative impact
  • Medical collections are treated differently than other types of debt. Unpaid medical collections will have less of a negative impact on FICO Score 9.
  • Rental history, when it’s reported, factors into the score—this may be especially beneficial for people with a limited credit history
  • Part 2: Industry-specific FICO® Scores

    Industry-specific FICO® Scores are versions of FICO® Scores that are optimized for a certain type of credit product, such as auto loans or credit cards. The foundation of these versions is the same as the base FICO® Score versions, but they are fine-tuned based on industry-specific risk behavior.

    What’s the difference between base FICO® Scores and industry-specific FICO® Scores?

    Base FICO® Scores, like FICO® Score 8, are created to forecast the likelihood of failing to pay any debt, including a mortgage, credit card, student loan, or other debt, in the future.

    Industry-specific FICO® Scores are made to determine the likelihood that a particular type of credit obligation—like a car loan or a credit card—won’t be paid back as agreed.

    Industry-specific FICO® Scores incorporate the base FICO®Scores’ predictive power while also giving lenders a more specialized credit risk evaluation based on the kind of credit the customer is looking for. For instance, rather than using base FICO® Scores, auto lenders and credit card companies may instead use FICO® Auto Scores and FICO® Bankcard Scores, respectively.

    These characteristics of FICO® Auto Scores and FICO® Bankcard Scores are shared:

  • Many lenders may use these scores instead of the base FICO® Score
  • It is up to each lender to determine which score they will use and what other financial information they will consider in their credit review process
  • The versions range from 250-900 (compared to 300-850 for base FICO® Scores) and higher scores continue to equate to lower risk
  • Which FICO® Score version is important to me?

    Knowing your FICO® Auto Scores, the industry-specific scores used in the majority of auto financing-related credit evaluations, is likely something you’ll want to do if you’re financing a new car.

    You’ll probably want to know your FICO® Bankcard Scores or FICO® Score 8 if you’re applying for a credit card, as these are the score versions that many credit card issuers use.

    You should be familiar with the base FICO® Score versions prior to FICO® Score 8 because they are the scores used in the majority of mortgage-related credit evaluations, whether you are buying a home or refinancing an existing mortgage.

    Your FICO® Score 8, which is the score that lenders most frequently use, will likely be important to you for other types of credit like personal loans, student loans, and retail credit.

    Will Mortgage Rate Shopping Hurt My Credit?

    A hard inquiry will be made of your credit history each time you apply for new credit. Although only 10% of the total points are determined by hard inquiries, they will reduce your score by a few points.

    FICO models, however, permit customers to compare offers for the same kind of credit within a set amount of time.

    The credit bureaus can tell that you’re comparison shopping because they can tell what kinds of credit you’re applying for.

    The Consumer Federal Protection Bureau (CFPB) claims that as long as mortgage brokers or lenders conduct their inquiries within a 45-day window, the effect on your credit is unaffected by the number of inquiries.

    It’s crucial to remember, though, that some businesses still utilize outdated FICO models. Some older FICO models only give multiple inquiries 14 days to have the same effect as one.

    As a result, it’s a good idea to try to limit your credit pulls for rate comparison to two weeks.

    If a lender has already requested a copy of your tri-merge credit report and mid-FICO score, for example, you can simply share this information to get a quote from any mortgage broker or lender. For an informal rate quote or analysis, they most definitely do not require a credit report, but only when they are prepared to formally secure pre-approval and fix an interest rate.


    Can FICO 8 be used for mortgage?

    Base FICO® Scores, like the FICO Score 8, are made to forecast the likelihood of failing to pay any debt, including credit card debt, student loans, and mortgages, in the future.

    Which FICO 8 score do mortgage lenders use?

    Banks use the following FICO scores when you apply for a mortgage even though the FICO® 8 model is the most popular scoring model for general lending decisions: FICO® Score 2 (Experian), FICO® Score 5 (Equifax), and FICO® Score 4 (TransUnion).

    Is FICO 8 still used?

    Two more recent iterations of the base scores—FICO Scores 9 and 10—have been made available since the launch of FICO Score 8. However, the credit-scoring business claims that FICO Score 8 is still one of the most popular FICO credit scores. Businesses decide which credit scores to use when deciding whether to lend money.

    Which credit cards use FICO score 8?

    Citi provides access to the FICO Bankcard Score 8, which it uses in conjunction with other data to manage its customers’ credit card accounts. Additionally, you can access all of your FICO score versions through myFICO for a monthly fee. com.