When I qualify a potential borrower for a mortgage I always ask “How’s your credit looking?” Better to know up front what we’re dealing with as credit scoring is a major factor on what kind of loan program and interest rate we’ll be working with. They may convey that they see a certain credit score, but I warn them that when I pull the credit on my end, the score may not correlate with what they’re seeing.
These days, just about everyone has access to their credit score whether it’s through a bank, a credit card app, or a free site. That’s a great tool to stay on top of your finances. But here’s the reality:
The score you see is often not the one lenders use when you apply for a mortgage or a car loan.
And that disconnect can be the difference between qualifying… or not.
Here’s What Most People Don’t Know:
1. There’s More Than One Credit Score Model
There’s no such thing as one credit score. There are many and they vary based on the type of loan you’re applying for.
- Mortgage lenders many times use older FICO models: FICO 2 (Experian), FICO 4 (TransUnion), and FICO 5 (Equifax). These models weigh certain items like installment loan history, medical debt, and delinquencies differently than the more modern scores. NOTE: One of the main reasons lenders don’t immediately use the latest scoring models is because the Secondary Money Market that buys the Mortgage Backed Securities have a payment/foreclosure risk pricing system already in place based on the previous mortgage’s credit scoring payment histories. It takes a long payment history build a new risk algorithm that the bond investors can use.
- Auto lenders often use something called a FICO Auto Score, which puts more weight on your past auto loan payment behavior and repossession risk.
- The score you see on your phone or credit card app? That’s usually a VantageScore, or maybe a newer FICO version. Either way, not what mortgage or auto lenders are pulling.
2. Consumer Scores Are for Education — Not Lending Decisions
Those scores you’re seeing are meant to give you a rough sense of your credit health, not to determine your actual loan terms. Lenders pay for access to specific scoring models designed to predict how risky you are for that particular type of loan. So just because your credit card app says you have a 745, that doesn’t mean that’s what a mortgage or auto lender will see or use.
3. Mortgage Loans Use a Tri-Merge Credit Report
In the mortgage world, lenders pull a tri-merge report which pulls scores from all three bureaus and gives us the middle score. If your app only shows you one bureau (and a different scoring model), you could be seeing something that’s 20–40 points off from what matters.
4. Timing Makes a Difference Too
Your app might update your score monthly, but lenders pull live data when you apply. If your balances went up, you had a new inquiry, or an account reported late your score could be different that day, even if your app hasn’t caught up yet.
Bottom Line
If you’re applying for a mortgage or a car loan, don’t assume the credit score you see on your phone is the one that counts. Each type of lender uses different algorithms and scoring models tailored to their risk assessments.
Before you make a big move, especially with a home purchase or refinance, let a mortgage pro (like me) pull your actual mortgage-grade credit report so you’re looking at the same numbers lenders are. It can save time, money, and surprises.
Better yet, do a full financial and credit evaluation well before you’re thinking about getting a mortgage. On a preapproval I’ll generally do a preliminary “Soft” credit pull, so the inquiry won’t register in the credit reporting system and an Inquiry won’t hit your credit score. I understand the credit system, and there may be some valuable preliminary strategies used to increase credit scores that can be advantageous to get better rates. Some elements can take a month or so to filter through the systems, so earlier the better.
Reach out if you’re thinking about buying, refinancing, or just want to know where you really stand. I’m happy to walk you through it.
If you are in the Los Angeles area, and have any questions or real estate sales or financing needs, feel free to contact me
Ron Henderson GRI, SRES, SFR, RECS, CIAS, CREN, GREEN
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – Southland Regional Association of Realtors (2025)
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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