Mortgage Lenders use a loan applicant’s middle credit score for loan purposes. The following are examples of what credit scores impact on a Home Loan:
- Interest Rate
- Mortgage Insurance Costs (if applicable)
- Loan Program Eligibility
Sample Middle Score Determination
When there is 1 borrower on a loan application, their middle score is determined as follows:
Single Borrower Example
Joe Buyer: Experian Score 740 | TransUnion Score 757 | Equifax Score 770
When there multiple borrowers on a loan application, lenders use the lowest mid score among all applicants.
Mid score for this Joe’s Application is 723 (Joe’s TransUnion Score)
Multiple Borrower Example
Joe Buyer: Experian Score 740 | TransUnion Score 757 | Equifax Score 770
Sue Buyer: Experian Score 751 | TransUnion Score 723 | Equifax Score 780
Mid score for this Joe and Sue’s Loan Application is 723 (Sue’s TransUnion Score)
Applicant’s With Less Than 3 Scores
Typically, loan applicants will have 3 scores. One score for each of the major credit bureaus (Experian, TransUnion, Equifax). However, when applicants have less than 3 scores the middle score is determined as follows:
Applicants with 2 scores: The lower of the 2 scores the applicants middle score
Applicants with 1 score: The 1 score is the applicants middle score
Borrowers that have less than 3 scores due to 1 or more of their scores being “frozen” must unfreeze all frozen bureaus when applying for a home loan. The above only applies to applicants who truly have less than 3 scores reporting typically due to a lack of credit history.