What Is Credit Score?
Credit Score: A three-digit number from 300 to 850 that predicts how likely you are to repay debt.
Also called: FICO score
A credit score is a number, usually between 300 and 850, calculated from your credit report. Higher scores signal lower risk and earn better mortgage pricing.
What goes into it
Roughly, for FICO scores:
- Payment history (35%): on-time payments, lates, collections
- Amounts owed (30%): especially credit card utilization
- Length of history (15%)
- New credit (10%): recent accounts and inquiries
- Credit mix (10%)
How mortgage lenders use it
Mortgage lenders pull scores from Equifax, Experian and TransUnion. They use the middle of the three. With two borrowers, many programs use the lower of the two middle scores.
Why it matters
Your score decides which programs you qualify for and moves your rate. On conventional loans, loan-level price adjustments change in roughly 20-point bands.
Good to know
The mortgage scores lenders use are often older FICO versions, so they can differ from the free score in your banking app.