What credit score is used when a couple buys a house?

Credit Score Assessment for Couples Applying for a Mortgage

When a couple applies for a mortgage, mortgage lenders typically obtain their credit reports from all three major credit bureaus: Equifax, Experian, and TransUnion. This comprehensive analysis aims to provide a thorough understanding of the creditworthiness of both individuals.

From the individual credit reports, a single, combined FICO® score report is generated. The FICO® score is a widely accepted measure of creditworthiness that ranges from 300 to 850, with higher scores indicating better credit.

For couples applying for a mortgage jointly, the lender may use different methods to combine their credit scores. One common approach is to calculate the median score. The median score is the middle score when the individual scores are arranged in ascending order. Using the median score ensures that one high or low score does not disproportionately impact the overall assessment.

Another approach for couples is to use the lower median score. This method considers the lower of the two median scores, providing a more conservative assessment. Lenders may prefer this approach since it reflects the higher risk associated with the individual with the lower credit score.

By examining the credit scores of both applicants, mortgage lenders gain a more holistic view of the couple’s financial profile. This information is used to determine the couple’s eligibility for a mortgage, as well as the interest rate and loan terms they qualify for.

Couples applying for a mortgage should strive to maintain strong credit scores by making timely payments, keeping debt levels low, and utilizing credit responsibly. Doing so will increase their chances of securing favorable mortgage terms and reducing the overall cost of their loan.