Credit Score

A credit score is a numerical representation of your creditworthiness, calculated based on your history of borrowing and repaying debt. Mortgage lenders typically use FICO scores from all three major credit bureaus — Equifax, Experian, and TransUnion — and qualify you based on the middle score. FICO scores range from 300 to 850.

FICO Score Ranges and What They Mean for Mortgage Lending: 760+ is considered excellent and typically qualifies for the best interest rates. 700–759 is good and qualifies for competitive rates on most loan programs. 660–699 is fair — you may qualify but could see higher rates or need compensating factors. 620–659 is the minimum range for most conventional loans. Below 620, you may still qualify for FHA (minimum 580) or VA loans, which have more flexible credit requirements.

Five Factors That Determine Your FICO Score: Payment history (35%) — whether you pay bills on time. Amounts owed (30%) — how much of your available credit you are using, also called credit utilization. Length of credit history (15%) — how long your accounts have been open. Credit mix (10%) — the variety of credit types you manage, such as credit cards, auto loans, and installment debt. New credit inquiries (10%) — how many times you have recently applied for new credit.

What FICO Does Not Consider: Your income, salary, or employment status. Your age, race, gender, or marital status. Where you live. Whether you have been denied credit before. Your rent payments (unless reported to the bureaus). Your bank account balances. These factors may matter to a lender during underwriting, but they do not affect your FICO score itself.

FICO vs. VantageScore — Why Your Bank App Shows a Different Number: The free credit score from your bank, Credit Karma, or credit card company is usually a VantageScore, not a FICO score. Mortgage lenders use FICO scores pulled directly from the credit bureaus, which are often 20–40 points different. Never assume the number you see in an app is the number your lender will use — always ask your loan officer to pull your actual mortgage credit scores before making decisions.

Tips to Improve Your Credit Score Before Applying: Pay every bill on time — even one 30-day late payment can drop your score significantly. Pay down credit card balances below 30% of your limit (below 10% is ideal). Do not open new credit accounts or take on new debt in the months before applying. Do not close old credit cards — the length of history helps your score. Check your credit report for errors and dispute anything inaccurate. Opt out of pre-screened credit offers at OptOutPrescreen.com (1-888-567-8688) — this stops credit card companies and lenders from running soft inquiries for unsolicited offers, reducing unnecessary activity on your credit file and cutting down on junk mail that could tempt you into new debt.

A Common Misconception: Checking your own credit does not hurt your score. That is a soft inquiry. When a lender pulls your credit for a mortgage application, that is a hard inquiry — and multiple mortgage inquiries within a 14–45 day window are treated as a single inquiry by FICO, so shopping for rates does not damage your score.

Why This Matters: Your credit score is one of the most influential factors in your mortgage. It affects your interest rate, your loan program options, your required down payment, and even your monthly mortgage insurance cost. Understanding where you stand — and what moves the needle — gives you the power to improve your position before you apply. If your score is not where you want it, Kara can help you build a plan to get there.