Which FICO score is most important

Some once asked HMAC: Which FICO scores are most important for mortgage applications?

We GENERALLY use what is called the “mid score.” Most people have three FICO scores—one from each of the three credit repositories (Equifax, Experian, and TransUnion). We discard the high and the low using the one in the middle—the mid score.

This is especially important when we are doing a “rapid rescore” or “credit bureau update.” These both mean the same thing: using documentation acceptable to the credit bureaus, we can bypass the normal monthly reporting cycle for creditors. If we are paying down revolving debt, for example (credit cards), we will get a current statement from the borrower reflecting the lower balance. The credit report vendor will submit that document to the bureaus and get a new FICO score within about five days based on the lower balance. FICO scores begin to suffer when credit card balances exceed about 30% of the credit limit. The credit report vendors charge a fee for the rescore service, and since we are only looking improve the mid score, only one or two bureaus need to be updated. This saves the borrower a couple of hundred dollars.

Credit standards are not as stringent as some believe. You can buy a home with lower scores than you might think.

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