Credit Score Average Calculator

See the credit score calculator below

Loan officer handing a pen to the home buyerThe average credit score used by Fannie Mae is the minimum score required for borrowers to be approved for a mortgage that Fannie Mae will buy. In the past, obtaining a mortgage from Fannie Mae required having a credit score of at least 620. Nevertheless, this guideline could change based on the loan type and other variables. Higher credit scores often signal lesser risk, and these consumers may frequently get better loan conditions and interest rates.

The Impact of the FICO Score 9 Model

With the implementation of the new FICO Score 9 model, Fannie Mae could be more inclined to buy mortgages from borrowers with lower credit scores if those borrowers have already shown responsible financial conduct in other ways. This would make it easier for more people to become homeowners, which is something Fannie Mae and other housing-related businesses want.

Fannie Mae Credit Score Averaging Guidelines

To assess eligibility, the lender may compare the co-borrowers ratings by a new Fannie Mae credit score guideline. The average credit score would be 665 if two co-borrowers had credit ratings of 720 and 610, as in the previous case. With their average now over the 620 thresholds, the co-borrowers are qualified to purchase a property or refinance, thanks to their higher score.

To put it more broadly, lenders often get three credit ratings for each applicant. The average of the middle score (rather than the lowest or highest of the three scores) would be used to establish eligibility under this new rule.

Fannie Mae's new credit score averaging guideline may considerably impact borrowers applying for a mortgage. In the past, if two co-borrowers applied for a mortgage jointly, the lesser credit scores would be used to assess eligibility based on each borrower's credit rating. The new requirement allows lenders to include co-borrower scores, possibly bringing the average score over the qualifying threshold.

Consider two co-borrowers requesting a mortgage with credit ratings of 720 and 610, respectively. The co-borrowers ability to secure a mortgage would have been hampered by the previous regulation, which utilized the lower score of 610 to assess eligibility. The new law, however, averages the two results to get a total of 665, which is above the 620 minimum criteria for qualifying. The co-borrowers might therefore purchase a property or restructure their mortgage.

It's important to remember that lenders often obtain three credit scores for each applicant, with the middle score frequently being utilized to establish eligibility. The new law, however, mandates that lenders consider the median average scores for each co-borrower to assess eligibility. This implies that the average will be utilized when one co-borrower has a better score than the other, thereby helping borrowers who would have previously been disqualified owing to a lower credit score.

Benefits for Borrowers with Poor Credit Scores

In general, Fannie Mae's new credit score averaging guideline may make it simpler for more people to qualify for a mortgage, especially if they are applying with a co-borrower whose credit score may have previously been an obstacle. While credit scores are one element lenders consider when establishing eligibility, borrowers must remember this. Other variables may be at play, such as income and debt-to-income ratio.

Borrowers with less-than-perfect credit histories or prior financial issues could benefit from Fannie Mae's regulation on credit score averaging. They are utilizing credit scoring models and considering co-borrowers credit scores and lenders.

Furthermore, it's important for borrowers to monitor their credit scores regularly and work to improve them if necessary. This can be done by paying bills on time, reducing outstanding debts, and correcting any errors on credit reports. By taking these steps, borrowers can increase their chances of qualifying for a mortgage and securing favorable loan terms.

Here's How the Credit Score Averaging Calculator Works

The Federal National Mortgage Association is now averaging credit scores through their automated underwriting software. In past years, the lowest middle score was used by lenders and automated underwriting systems.

For example:
Borrower 1) Scores: 590, 605, 648 Middle Score: 605

Borrower 2) Scores: 661, 693, 693 Middle Score: 693

Under the previous calculation, the middle score of 605 was used in the underwriting/approval process.
But now the representative credit score is obtained by averaging the credit scores.

Here's a calculator that will average the credit scores:

  Experian Transunion Equifax Average Score
Borrower 1
Borrower 2
Average Credit Score    


In conclusion, Fannie Mae's new credit score averaging guideline can potentially increase homeownership opportunities for many borrowers, especially those with lower credit scores applying with a co-borrower. 

However, it is not a guarantee, and borrowers should still strive to maintain good credit and meet other eligibility criteria set by lenders. By being informed and proactive about their credit scores and financial standing, borrowers can improve their chances of achieving their homeownership goals. 

Additionally, borrowers should review their credit reports frequently and fix errors or inaccuracies to improve their credit scores. In summary, Fannie Mae's credit score averaging regulation is a step toward making homeownership more accessible to a larger number of borrowers.

By taking into account co-borrower credit scores and using an average credit score calculation, borrowers with lower credit scores may still have a chance to qualify for a mortgage. However, borrowers must remember that credit scores are not the only factor lenders consider when determining eligibility for a mortgage. Other variables, such as income and debt-to-income ratio, are critical. Therefore, borrowers should work to improve their overall financial standing to boost their chances of securing a mortgage.

Fannie Mae Credit Scoring Changes Could Help More Borrowers Qualify
General Requirements for Credit Scores
Requirements for Credit Reports