Even if you have 2 out of three credit scores under 500, there are a few lenders that will take the average of all three credit scores to do the loan for you. For example, if you have a 485, a 490 and a 525, this will give you a 500 average score and these lenders will use that score to determine your eligibility for the loan. This is in contrast to the most common way of using the three credit scores, which is simply to use the middle of the three scores, or the lower of two when there are only two scores available. There are also lenders known as hard money lenders that do not underwrite mortgage loans based on credit scores but more based on the amount of equity in the property. Hard money loans are generally supposed to be short term loans and come with much higher interest rates and fees than more conventional type loans, due to amount of risk involved.

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