How lenders use FICO® Scores for Home Loans

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90% of top U.S. lenders use FICO® Scores when making lending decisions

When you apply for credit—whether it’s for a credit card, car loan, mortgage or other type of credit—lenders will want to know your credit risk. That is, they’ll want to do a credit check to know how likely you are to pay back your credit obligations as agreed. To help them understand your credit risk, lenders use FICO Scores.

FICO Scores help lenders quickly, consistently and objectively evaluate potential borrowers’ credit risk. So when you apply for credit or a loan, there’s a very good chance your lender will use your FICO Scores to help them decide whether to approve you, and what terms and rates you qualify for.

Different lenders use different versions of FICO®Scores

You have more than one FICO Score—depending on what type of credit you’re seeking, your lenders may evaluate your credit risk using different FICO Score versions. Auto lenders, for instance, often use FICO® Auto Scores, an industry-specific FICO Score version that’s been tailored to their needs. Most credit card issuers, on the other hand, use FICO® Bankcard Scores or FICO® Score 8.

It’s also important to note that for most credit evaluations—such as a credit card application—lenders will use a FICO Score from just one of the three credit bureaus. For a mortgage or home equity loan application, however, lenders usually take into account a FICO Score from each of the three credit bureaus.

FICO® Score versions

You have more than one FICO score

FICO® Scores have been in use for over 25 years by many kinds of lenders to make more informed credit granting decisions. To keep up with behavioral trends of consumers and to suit the evolving needs of lenders, the FICO® Score model has been redeveloped over the years. The result is that there are multiple FICO® Score versions available in addition to the most widely used version, FICO® Score 8.

Additional FICO® Score versions, including prior base FICO® Score versions as well as industry-specific auto and bankcard versions, are also included in the FICO® Score.

Experian, Equifax, TransUnion:  FICO® Score 8
Versions used in mortgage lending:  FICO® Score 2, FICO® Score 5, FICO® Score 4


With all FICO® Score versions, the keys to FICO® Scores remain the same:


  • Make payments on time
  • Keep credit card balances low
  • Open new credit accounts only when needed

Part 1: Base FICO® Score versions and updates

One reason why there are multiple FICO® Score versions is that the FICO® Score model is updated periodically, resulting in a new FICO® Score version released to market every several years. The most recent FICO® Score version that is widely used by lenders is FICO® Score 8.

Why are there multiple FICO® Score versions?

Since FICO® Scores were introduced to lenders over 25 years ago, they have become an industry standard—the best-known and most widely used credit score. But quite a bit has changed since lenders first started using FICO® Scores in 1989. Lender credit-granting requirements, data reporting practices, consumer demand for credit, and consumer use of credit have all evolved.

FICO has redeveloped its scoring formula several times to keep pace with this changing credit landscape, ensuring that it remains an intuitive predictor of credit risk. FICO® Score models are updated to keep lending fast and fair for both the lender and consumer. When we update our model, we make sure that the score reflects changing consumer credit behavior, includes our newest analytic technology, and is adjusted for recent data reporting enhancements.

When a new FICO® Score version is developed, we release it to the market. From there, each lender determines if and when it will upgrade to the latest version. Some lenders make the upgrade quickly, while others may take several years. This is why some lenders are currently using different versions of the FICO® Score. An example, FICO® Score 5 at Equifax is the FICO® Score version previous to FICO® Score 8 at Equifax.

It helps to think of how people use different versions of computer operating systems or have older or newer generations of smart phones. They all share the same base functionality, but the latest versions also have unique updated features to meet evolving user needs.

The same goes for FICO® Scores. The various score versions in use today all share a similar underlying foundation—effectively identifying high risk credit users from low risk ones. With every score update, however, unique features are incorporated that leverage new risk prediction technology and better reflect recent consumer credit behavior. The end result is a more predictive score that helps lenders make more informed lending decisions, which ultimately makes the credit process easier, faster, and fairer for you.

FICO® Score 9—the newest FICO Score version—is the most predictive FICO Score to date

Many lenders have already upgraded to, or are in the process of upgrading to, FICO®Score 9. It’s our newest FICO® Score version, and it has a few important updates that make it the most predictive FICO Score yet.

  • Third-party collections that have been paid off no longer have a negative impact
  • Medical collections are treated differently than other types of debt. Unpaid medical collections will have less of a negative impact on FICO Score 9.
  • Rental history, when it’s reported, factors into the score—this may be especially beneficial for people with a limited credit history

Part 2: Industry-specific FICO® Scores

Industry-specific FICO® Scores are versions of FICO® Scores that are optimized for a certain type of credit product, such as auto loans or credit cards. The foundation of these versions is the same as the base FICO® Score versions, but they are fine-tuned based on industry-specific risk behavior.

What’s the difference between base FICO® Scores and industry-specific FICO® Scores?

Base FICO® Scores, such as FICO® Score 8, are designed to predict the likelihood of not paying as agreed in the future on any credit obligation, whether it’s a mortgage, credit card, student loan or other credit product.

Industry-specific FICO® Scores are designed to assess the likelihood of not paying as agreed on a specific type of credit obligation—car loans or credit cards, for example.

Industry-specific FICO® Scores incorporate the predictive power of base FICO®Scores while also providing lenders a further-refined credit risk assessment tailored to the type of credit the consumer is seeking. For example, auto lenders and credit card issuers may use FICO® Auto Score or a FICO® Bankcard Score, respectively, instead of base FICO® Scores.

FICO® Auto Scores and FICO® Bankcard Scores have these aspects in common:

  • Many lenders may use these scores instead of the base FICO® Score
  • It is up to each lender to determine which score they will use and what other financial information they will consider in their credit review process
  • The versions range from 250-900 (compared to 300-850 for base FICO® Scores) and higher scores continue to equate to lower risk

Which FICO® Score version is important to me?

Purchasing a home or refinancing an existing mortgage? You’ll want to know the base FICO® Score versions previous to FICO® Score 8, as these are the scores used in the majority of mortgage-related credit evaluations.

For other types of credit such as personal loans, student loans, and retail credit, you’ll likely want to know your FICO® Score 8, the score most widely used by lenders.

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