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Credit Scores for Mortgage Approvals Explained

Wednesday, July 12, 2023   /   by Kory White

Credit Scores for Mortgage Approvals Explained

FICO 4 and FICO 2 are both credit scores that are used by lenders to determine your credit risk and the interest rate you will be charged for a mortgage. FICO 4 is a newer version of FICO 2, and it is designed to be more predictive of future credit risk.



FICO 4 scores are based on the following factors:



    • Payment history: This is the most important factor in determining your FICO 4 score. Lenders want to see that you have a history of making your payments on time.

    • Amounts owed: Lenders also want to see that you are not overextended. They will look at your total debt load and your debt-to-income ratio.

    • Length of credit history: Lenders want to see that you have a long history of using credit responsibly.

    • Recent inquiries: Lenders will look at how many inquiries have been made on your credit report in the past two years.

    • Types of credit: Lenders will look at the types of credit you have used, such as credit cards, auto loans, and mortgages.


FICO 2 scores are based on the same factors as FICO 4 scores, but they do not include the following factors:



    • Recent inquiries: Lenders did not consider recent inquiries when calculating FICO 2 scores.

    • Types of credit: Lenders did not consider the types of credit you have used when calculating FICO 2 scores.


FICO 2 scores are still used by some lenders, but most lenders have switched to using FICO 4 scores. FICO 4 scores are more predictive of future credit risk, so they are more likely to give you a more accurate idea of your creditworthiness.



If you are planning to apply for a mortgage, I recommend getting your FICO 4 score. You can get your FICO 4 score from myFICO.com or from some other credit monitoring services.



In order for me to find out exactly what we can do, please pull your MyFico Credit Scores. There is a $39 fee to get the scores, and they are just the most accurate service to check: https://bit.ly/3DBVnH4



If you have any problems with the site, Call the Support Center for MyFico: 1-800-319-4433



AFTER YOU SIGN UP:


Log into MyFico ?? Dashboard ?? Reports ?? 3B Report ?? Scores ?? Scroll Down ?? Go to Mortgage Scores



If you can, let me know what three scores are there, FICO 2 & 4 are the scores that lenders use to qualify you for a mortgage. 



LINK TO PULL SCORES: https://bit.ly/3DBVnH4


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Kory White Real Estate Group
Kory White
13101 Preston Road Suite 110-801
Dallas, TX 75240
469-737-0059

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