Credit Score Used by Lenders
Many of my clients keep an eye on their credit scores via Credit Karma or through one of their credit card companies – or both. Most of these scores are coming from VantageScore, a joint venture created in 2006 by TransUnion, Experian, and Equifax, the three largest credit-reporting firms. However, the credit score most widely used by banks and financial institutions for mortgages is your FICO credit score provided by Fair Isaac Corporation, which has been around since 1956. The reason for this is that most lenders end up selling their mortgages to Fannie Mae and Freddie Mac, and their guidelines rely on the FICO credit score. The differences in how these two scores are created is the subject of a very interesting article from CNBC. Please click here to read the full article.