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Why Is Credit Score Used By Mortgage Lender Lower Than Score On App?

Why is the credit score used by my mortgage lender lower than the score provided by the free credit score app I use?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

Most free credit score apps use what is called the VantageScore model to pull your score. The VantageScore model is similar to, but different and less precise than, the FICO credit score model used by banks when you apply for a mortgage. This does not mean that free credit score apps are inaccurate or not helpful, just that they provide a more directional assessment of your credit profile. In fact, we frequently recommend that borrowers use free credit apps because they allow you to monitor your scores for free and identify major issues with your credit profile before you apply for a mortgage, which is a valuable service.

The scores provide by these free apps are sometimes called "educational scores" because they provide one version of your credit score rather than your precise FICO score, although the two versions should directionally similar and a significant difference in scores of 20 points or more raises some questions.

The difference in the score provided by your app and the score used by the lender could be caused by one reflecting more updated information or because the lender you spoke with pulled your score from a different credit bureau then the bureau used by your app. For example, your free credit score app may be based on your Equifax score but the lender may have used your Experian or TransUnion score.

Your credit score can vary across the three credit bureaus -- Experian, Equifax and TransUnion -- because they may access different credit account information or use different scoring methodologies. For example, you may have a collection that appears on your credit report for one of the credit bureaus but not the other two, so your score for that bureau may be lower.

Lenders typically use your middle score among the three credit bureaus to determine your ability to qualify for a mortgage and your loan terms. Additionally, if you are applying for a mortgage with a co-borrower, lenders typically use the lower score between the two borrowers. This is why it is important that you understand your credit profiles for all three credit bureaus -- and for both borrowers -- several months prior to applying for a mortgage.

If you want to understand the score discrepancy you may want to ask the lender what source or credit bureau they used. If the lender pulled your score from the same source as your app then you may want to contact that credit bureau to understand why the scores are so different.

If the lender pulled your score from another credit bureau, then you should try to determine why your score is lower for that bureau and address any issues you find. You should also contact the app company to understand the source for their score and how updated their information is.

You may also want to check out AnnualCreditReport, which is another service that enables you to check your credit report (not just your credit score) free, once a year. Reviewing your credit report should provide you with much more detailed information on your credit profile and enable you to proactively resolve potential issues.

We also provide a comprehensive overview of your credit score and the mortgage process as well as a helpful explanation of how to compare mortgage quotes without hurting your credit score. These resources explain how to shop for a mortgage without negatively impacting your credit profile.

Finally, we always recommend that you contact multiple lenders to understand how they would handle your personal situation. You can review lenders in your area on the table below. We advise you to contact at least five lenders as qualification guidelines vary. Plus, shopping multiple lenders is the best way to save money on your mortgage.

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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

You can also use our Mortgage Pre-Approval form to get pre-approved for your loan. Getting pre-approved enables you to understand what size mortgage you qualify for and allows you to move quickly and with greater certainty when you shop for a home. Our Pre-Approval form is free, no obligation and does not affect your credit.

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%
Current Mortgage Rates as of March 25, 2019
  • Lender
  • APR
  • Loan Type
  • Rate
  • Payment
  • Fees
  • Contact
View All Lenders

%

Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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