Posts Tagged ‘FICO’

One of the situations I see often is when a person has great credit but their spouse does not.   With FICO scores taking and even more important role in qualifying for a mortgage today than even just six months ago, this can be a very big issue for potential home buyers and folks looking to refinance.

Most people assume that lenders go off the breadwinner’s FICO score which IS NOT the case.  Lenders take the lowest middle FICO score between both borrowers.    So if Joe has FICO scores of 775, 780, 740 and his wife has FICO scores of 720, 710, and 680; theFICO score used for qualification purposes is Joe’s wife’s middle score of 710.

In this example, Joe is likely to pay a higher interest rate because his wife does not have a 740 FICO score which is needed to qualify for the most competitive rate these days.    In most cases, I would just drop Joe’s wife from the loan application and only use Joe for qualifying purposes.    Joe’s wife would still be on the title to the property, but would not be responsible for the mortgage.

However, what do you do if you need both incomes to qualify for the mortgage?  In short, you are your spouses credit!  If you need both incomes to qualify for the mortgage and your spouse has bad credit, it means YOU have bad credit to.

So the next time you are picking up potential mates at a bar, instead of asking for a phone number you may want to ask for a FICO score instead.


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