Selling Guide

Published October 7, 2020

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B3-5.1-02, Determining the Representative Credit Score for a Mortgage Loan (08/30/2016)

Introduction

This topic contains requirements associated with determining the representative credit score, including:

 

Representative Credit Score

The representative credit score for the mortgage loan is determined based on the credit scores of each borrower and is used to determine loan eligibility and for pricing purposes (i.e., assessing LLPAs). Follow these steps to calculate the representative credit score for a mortgage:

Step Description
1

Fannie Mae recommends obtaining at least two credit scores for each borrower.

2

Select a single applicable score for underwriting each borrower.

  • When two credit scores are obtained, choose the lower score.

  • When three credit scores are obtained, choose the middle score. (If two of the three scores are the same, choose the middle of the three scores. For example: 700, 680, 680 = 680; 700, 700, 680 = 700)

3

If there is only one borrower, the single applicable score used to underwrite that borrower is the representative credit score for the mortgage.

If there are multiple borrowers, determine the applicable credit score for each individual borrower and select the lowest applicable score from the group as the representative credit score for the mortgage. If there is a borrower on the loan who does not have a credit score, determine the representative credit score for the mortgage based on the credit scores of the other borrowers on the mortgage.

 

Foreign Credit Reports and Credit Scores

With the exception of loan casefiles underwritten through DU, Fannie Mae permits the lender to use a credit report from a foreign country to document a borrower's credit history. (See B3-5.2-01, Requirements for Credit Reports.) If a credit score is provided with the foreign credit report it cannot be used to establish eligibility unless the credit score is the classic FICO, as required by B3-5.1-01, General Requirements for Credit Scores. In addition, the lender must not deliver the foreign credit score to Fannie Mae and it cannot be relied upon to establish eligibility (unless the credit score is the classic FICO). See Section B3–5.4, Nontraditional Credit History, for requirements that apply when a loan includes a borrower without an acceptable credit score.

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