In the last two months, the national debt has increased by 4 trillion dollars. As a country, we owe more money than ever. My mom always told me to take care of my own dishes before I looked in someone else’s sink. Well, how does your kitchen sink look? Here at Mortgage Gumbo, we preach that your credit score is so very important when it comes to getting a home loan. It will also be a factor in the mortgage rate you pay.

There are two types of credit-scoring models that are used to determine your credit rating, Fico and Vantage. Both give you your credit score, but the way they determine that score is very different. Vantage scores can be much higher than Fico scores because they use a different scoring method. Vantage scores were developed in 2020 by the three major credit companies and are used by entities such as Credit Karma. Fico scores are a bit more stringent and are used by 90% of the top lenders.

Here are how the two break down:

Fico bases your score on the following and in this order:
1. Payment history
2. Current balances
3. Length of credit & history
4. New credit
5. Credit mix

Vantage bases your score on the following and in this order:
1. Available credit
2. Recent credit
3. Payment history
4. Total revolving credit
5. Length of credit and history
6. Current balances

Fico also looks at a 45-day period, where Vantage looks at a 15-day period. So, if you see a huge difference in your Fico score compared to your Vantage score, don’t be surprised.

What both do agree on are tips to keep your score up, and here, there should be no surprise. First and foremost, avoid late payments and pay your bills on time. Next would be to keep your credit balances at 30%. And lastly, don’t apply for credit unless it is necessary.

At Mortgage Gumbo we are here to educate and to let you know what your options are. If you have more questions about Fico and Vantage scores shoot us an email at info@mortgagegumbo.com or you can call me, Dwayne Stein anytime at 504-207-7600.