Why Doesn't My Online Credit Score Match My Score with a Mortgage Lender?

A number of factors can affect what credit score your lender sees.
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If you’re shopping for a mortgage, you have likely checked at least one online source to find your credit score. While knowing your credit score gives you an idea of whether you will qualify for a mortgage, you may be surprised to find that the credit score your mortgage lender sees can be significantly different from the one you know.

Proprietary Scores

The three major credit reporting bureaus that mortgage lenders typically use — Equifax, Experian and TransUnion — each use proprietary formulas for incorporating myriad factors into your credit score. Credit bureaus put a large amount of work and research into their proprietary credit score formulas, and they go to great lengths to keep the formulas confidential. For this reason, websites that offer to sell you your credit score typically use their own formulas for calculating your number, and the score you obtain from these services may be considerably different from the ones that credit bureaus actually report to lenders.

Middle Score

Mortgage lenders typically retrieve your credit score from each of the three major credit reporting bureaus. Because each of these credit bureaus uses its own proprietary formula for calculating your credit score, each agency likely reports a score that can differ from the other bureaus by 20 points or more. To ensure the most accurate representation of your credit worthiness, many mortgage lenders use the middle of the three scores for your mortgage application even if it does not match the one you retrieved online.

Credit Updates

Many lenders report your payment status to credit bureaus on a regular basis, and your credit file may get frequent updates if you have a large portfolio of credit cards, auto loans, mortgages, student loans and other credit accounts. Depending on how often your creditors report your activity, your credit score may change every day or, in some cases, several times a day. Even if you retrieve your actual credit score directly from credit bureaus just before submitting your mortgage application, your mortgage lender may not process the application right away. By the time the lender retrieves your credit score, it could be significantly different from the one you obtained online.

Other Factors

A number of other factors can make your mortgage lender’s credit score differ from the one you retrieve online. If you have a co-borrower, for example, the lender will likely retrieve both your score and your co-borrower’s credit score. The lender will likely pick the middle score from all retrieved scores, according to the financial website Dough Roller, and the additional scores could cause the middle score to be significantly different from the one you retrieved online. If one credit bureau does not have enough information to calculate a score for you, the lender will likely use the lower of the scores from the other two bureaus.

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