North Carolina-based mortgage lender Premier Lending Inc. has adopted the FICO Score 10 T credit-scoring model for its nonconforming loan originations and whole loan acquisitions.
Premier Lending is adopting FICO’s updated credit-scoring model “to continue to drive the company’s innovation strategy forward and help make more homeownership dreams a reality,” the company stated in a release.
“By integrating FICO Score 10 T into our arsenal, we’re elevating our credit decision-making for our products,” Fadi Faraj, CEO of Premier Lending, said in a statement.
FICO originally released 10 T in 2020, saying that the new model allowed lenders to have greater precision in making lending decisions through the incorporation of trended credit bureau data. The word “trended” is the source of the “T” in the 10 T name.
The 10 T model can expand mortgage approval rates by up to 5% relative to classic versions without adding incremental risk, according to FICO. The company also claims its 10 T model reduces default risk and losses by up to 17% by allowing lenders to project cash flows more accurately.
Government-sponsored enterprises Fannie Mae and Freddie Mac have relied on the classic credit models for nearly 20 years.
But the Federal Housing Finance Agency (FHFA) announced in late 2022 that it would replace the classic FICO credit model with FICO 10 T and VantageScore 4.0, a competing model that incorporates trended credit bureau data.
The original implementation timeline included a move from a tri-merge system to a bi-merge system in the first quarter of 2024. But concerns expressed by stakeholders and members of the U.S. Congress with FICO’s pricing changes delayed the transition.
Mortgage lenders that have adopted the FICO Score 10 T credit scoring model include Primis Mortgage, a subsidiary of Primis Bank; Movement Mortgage; and CrossCountry Mortgage.
Other lenders may follow suit since regulators plan to replace the classic credit system with an updated one to incorporate trended data.
Related
FAQs
Planet's use of FICO® Score 10 T adds to the momentum of the mortgage industry in proactively adopting the new credit scoring model. Lenders including Cardinal Financial, Primis Mortgage, Premier Lending and others have recently adopted the model for non-conforming mortgages.
What is FICO score 10 T? ›
The FICO 10T credit score includes trended data, which looks at individual consumers' payment and debt history for the previous 24-plus months to help calculate their credit scores.
What FICO score do bank lenders use? ›
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage: FICO® Score 2 (Experian) FICO® Score 5 (Equifax) FICO® Score 4 (TransUnion)
What percentage of lenders use the FICO score in the lending process? ›
FICO Scores are an industry standard
90% of top lenders use FICO Scores.
Do banks use FICO 10? ›
FICO 10 scores are now available for use by the three major credit bureaus. Shellenberger said adoption by lenders will take time. It can take months or “usually longer for large lenders.” Right now, most lenders still use the FICO 8, which was introduced in 2009, for most non-mortgage lending decisions.
What is the lowest FICO score to get a mortgage? ›
Credit score needed to buy a house, by mortgage type
| Loan Type | Minimum Credit Score |
|---|
| Conventional loans | 620 |
| FHA loans | 500 (with 10% down payment); 580 (with 3.5% down payment) |
| USDA loans | The USDA has no minimum limit, but lenders generally like to see at least 640 |
2 more rowsAug 14, 2024
FICO® 10 T Considers Trended Data for the First Time. Delinquencies Will Hurt Scores More Under FICO® 10. Credit Card Debt Will Have a Bigger Impact With FICO® 10. Personal Loans Might Lower Your FICO® 10 Score.
Where can I see my FICO 10 score? ›
You can access your FICO score versions from the Scores tab under Score versions by loan type. myFICO plans provide base FICO Score Versions and industry-specific FICO Score Versions used in mortgage lending, auto loans, and credit card lending.
What is 10 at T on credit report? ›
10 At T Wireline is a debt collection agency that specializes in purchasing and collecting overdue accounts. If you're seeing them on your credit report you likely have an unpaid balance.
What FICO score is needed to buy a house? ›
For a conventional mortgage in California, you typically need a minimum score of at least 600. If you qualify for certain government-backed loans, however, you may be able to buy a home with a score as low as 500.
The credit score required for purchasing a home with no down payment varies based on the loan program and the lender's criteria. Here's a general overview of credit score requirements. VA Loan: Minimum credit score of 620. USDA Loan: A credit score of at least 640 is typically required.
Which score is closest to FICO? ›
VantageScore. The VantageScore model—specifically Version 3.0 which is the most widely used—considers similar factors to the FICO score model.
Which FICO score is most accurate? ›
The primary credit scoring models are FICO® and VantageScore®, and both are equally accurate. Although both are accurate, most lenders are looking at your FICO score when you apply for a loan.
What FICO score is considered risky by lenders? ›
Deep subprime (credit scores below 580) Subprime (credit scores of 580-619) Near-prime (credit scores of 620-659)
Is a 900 credit score possible? ›
While achieving a CIBIL Score of 900 is technically possible, it is extremely rare. Scores above 760 are considered very good or exceptional, providing significant benefits such as lower interest rates and higher chances of loan approval.
What version of FICO does Fannie Mae use? ›
Credit Score Versions
Fannie Mae requires the following versions of the classic FICO score for both DU and manually underwritten mortgage loans: Equifax Beacon® 5.0; Experian®/Fair Isaac Risk Model V2SM; and. TransUnion FICO® Risk Score, Classic 04.
What FICO score does Pennymac use? ›
You will need a credit score of at least 620 to qualify for a conventional home loan from Pennymac. You'll generally want to have a debt-to-income ratio no higher than 45% when applying for a conventional loan. Pennymac is a mortgage lender based in California that has served more than 4 million homeowners.
Which lenders use Experian only? ›
Although there isn't a bank that exclusively uses Experian, some banks that typically use Experian data more commonly include American Express, Bank of America, and Wells Fargo.
What is the most widely used version of FICO? ›
The most widely used model is FICO 8, though the company has also created FICO 9 and FICO 10 Suite, which consists of FICO 10 and FICO 10T. There are also older versions of the score that are still used in specific lending scenarios, such as for mortgages and car loans.
