Why Do Credit Scores Appear Lower from the Lender?


If your buyers have recently been on a personal finance site to check their credit score and then applied for a mortgage, they may have been surprised at the difference in the credit score. That’s because the score they received from the personal finance site may be higher than the credit scores the lender receives when they pull a credit report.

Personal finance sites that can access credit history use a different algorithm to calculate a credit score. They provide more of a generic credit score that covers a wide range of credit products, whereas the lender’s algorithm is developed specifically for mortgage loans. The same holds true for when someone applies for a credit card or auto loan. Each industry will have a unique way of placing value or weighing the importance of the data in your credit history.

Even though scoring algorithms vary, the free personal finance sites can provide buyers with an insight into their credit report and score in general. From there, buyers can get an idea of where they stand and can check for any discrepancies on their report, such as late payments or accounts that may not be theirs. If buyers do notice discrepancies on their credit report, Ameris Bank mortgage bankers can provide free, rapid rescoring during the loan process to not only correct these errors, but also to possibly boost the buyer’s credit score. 

Credit scores can typically range from 300 to 900. For mortgages, 620 or above is generally recommended. If your buyers find themselves toward the lower end of this range, don’t worry. With time and diligent financial care, they can raise their score. For more tips to help buyers improve their credit score, read our helpful credit resources on amerisbank.com.

By: Marlene Sheard

Marlene is a mortgage marketing representative for Ameris Bank and previous sales and marketing president for her local Home Builders Association. She enjoys sharing her experiences for the buying, selling, and financing of homes.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All loans subject to credit approval.