How FICO Scores Work for Mortgage Lending in Louisiana+/

Your FICO Score Is Not Just a Number — It's Your Mortgage Price Tag

When you apply for a mortgage, your lender pulls your credit from all three bureaus — Equifax, Experian, and TransUnion. Each bureau produces a FICO score. Your lender uses the middle score to qualify you.If your scores are 720, 705, and 690, your qualifying score is 705.If you're applying with a co-borrower, the lender uses the lower of the two middle scores. That means both borrowers' credit matters.

What the Ranges Actually Mean

FICO scores range from 300 to 850. Here's how mortgage lenders generally view them:

• 760+ — Excellent. You'll qualify for the best rates available.
• 700–759 — Good. Competitive rates on most loan programs.
• 660–699 — Fair. You'll likely qualify, but rates may be higher and compensating factors may be needed.
• 620–659 — Minimum range for conventional loans. FHA may be a better fit.
• 580–619 — FHA loans are available with 3.5% down. VA loans are also flexible in this range.
• Below 580 — Options are limited, but not impossible. A plan can be built.

A difference of just 20 points can change your interest rate by 0.25% or more — which translates to thousands of dollars over the life of the loan.

The Five Factors That Make Up Your FICO Score

Your score isn't random. It's calculated from five specific categories:

1. Payment History (35%) — The biggest factor. Have you paid your bills on time? Even one 30-day late payment can cause a significant drop.
2. Amounts Owed (30%) — Also called credit utilization. If you have a $10,000 credit limit and a $7,000 balance, your utilization is 70% — which hurts your score. Under 30% is good. Under 10% is ideal.
3. Length of Credit History (15%) — How long have your accounts been open? Older accounts help. This is why closing old credit cards can actually hurt your score.
4. Credit Mix (10%) — Lenders like to see that you can manage different types of credit — credit cards, auto loans, student loans, etc.
5. New Credit Inquiries (10%) — Every time you apply for new credit, it generates a hard inquiry. Too many in a short period can signal risk.

What FICO Does NOT Consider

This surprises a lot of people. Your FICO score does not factor in:

• Your income or salary
• Your employment status or job title
• Your age, race, gender, or marital status
• Where you live
• Your bank account balances
• Whether you've been denied credit before
• Your rent payments (unless specifically reported to the bureaus)

These things matter during underwriting, but they don't move your FICO score.

Why Your Credit Karma Score Is Different From What Your Lender Pulls

This is one of the most common sources of confusion.The free score from Credit Karma, your bank app, or your credit card company is almost always a VantageScore — not a FICO score. Mortgage lenders don't use VantageScore. They use FICO.The two models weigh factors differently, and it's common to see a 20–40 point difference between them. Sometimes more.Never assume the score you see in an app is the score your lender will use. Always ask your loan officer to pull your actual mortgage credit scores before making decisions about what you can afford.

How to Improve Your Score Before You Apply

If your score isn't where you want it, here's what actually works:

• Pay every bill on time. Set up autopay if you need to. Payment history is 35% of your score.
• Pay down credit card balances. Get below 30% utilization — below 10% if you can.
• Don't open new credit accounts in the months before applying.
• Don't close old credit cards. Even if you don't use them, the history and available credit help.
• Check your credit report for errors. Dispute anything inaccurate at annualcreditreport.com.
• Avoid large purchases on credit before or during the mortgage process.
• Opt out of pre-screened credit offers at OptOutPrescreen.com or call 1-888-567-8688. This stops credit card companies from running soft inquiries for unsolicited offers and cuts down on junk mail that could tempt you into new debt before closing.

These steps don't take years. Many borrowers see meaningful improvement in 60–90 days with focused effort.

Does Shopping for Mortgage Rates Hurt Your Score?

No. FICO treats all mortgage-related inquiries within a 14–45 day window as a single inquiry. You can (and should) shop for rates without worrying about score damage.Checking your own credit is a soft inquiry — it never affects your score.

What If My Score Is Low Right Now?

A low score today does not mean you can't buy a home. It means we need a plan.Some borrowers qualify right now with an FHA or VA loan. Others benefit from a 60–90 day credit improvement strategy before applying. Either way, the first step is the same: get your actual scores pulled and know where you stand.I've helped hundreds of Louisiana families work through credit challenges. There's almost always a path forward.