Getting Your Credit in Shape to Get a Mortgage
Louisiana REALTORS® • July 11, 2024
Buying a home is one of the biggest financial commitments you will ever make. Getting a mortgage is a critical stage in this process, and getting a mortgage with favorable terms depends in large part on your credit score. Lenders use your credit score to determine your creditworthiness, which affects the interest rates and terms of the loans they offer. Preparing your credit before applying for a mortgage can save you hundreds of dollars over the course of the loan.
Understanding Credit Scores
Your credit score is a numerical representation of your creditworthiness, typically ranging from 300 to 850. The higher your score, the better your creditworthiness in the eyes of lenders. Credit scores are calculated based on several factors:
- Payment History (35%): Your record of on-time payments.
- Credit Utilization (30%): The amount of credit you're using compared to your credit limits.
- Length of Credit History (15%): The average age of your credit accounts.
- Credit Mix (10%): The variety of credit types you have, such as credit cards, loans, and mortgages.
- New Credit (10%): The number of recent credit inquiries and newly opened accounts.
Steps to Improve Your Credit Score
Review Your Credit Reports
Equifax, Experian, and TransUnion are the three main credit bureaus. Start by acquiring your credit reports from each. Every bureau is required to provide you with a free report once a year at AnnualCreditReport.com. Carefully check these reports for mistakes, such as inaccurate account information or fraudulent activity, and raise any discrepancies that you find.
Make Payments On Time
Your credit score is mostly influenced by the payment history you have provided. It's important to always pay your payments on time. For peace of mind, set up automated payments or reminders so you never forget a deadline. Your credit score can be severely impacted by even one late payment.
Cut Down on Credit Usage
The ratio of your outstanding credit card balances to your credit limits is known as credit usage. To raise your score, try to keep your utilization below 30%. Reduce your balances or ask for an increase in your credit limit, if at all possible (but avoid piling on extra debt).
Don't Create New Credit Accounts
Opening new credit accounts to increase your available credit may seem appealing, but doing so will temporarily drop your score because of hard queries and a decline in the average age of existing accounts. Create new accounts only when it is absolutely required.
Keep Your Old Credit Accounts Open
Keep older accounts open even if you don't use them much since your credit history matters. Your credit score may suffer if you close old accounts because doing so can decrease your credit history and lower your total amount of available credit.
Mix Up Your Credit
A variety of credit kinds, such as retail accounts, installment loans, and credit cards, can all help raise your score. However, only take on additional credit types if you can responsibly manage the payments and it makes sense for your financial condition.
Reduce Debt Wisely
Prioritize paying off high-interest debt in order to save money on interest and expedite the reduction of your total debt. To speed up your debt repayment, think about applying the avalanche or snowball methods, which pay off high-interest debt first and smaller balances last, respectively.
Keep an Eye on Your Credit
Use credit monitoring services to keep an eye on your credit record and score. Frequent monitoring keeps you updated on any changes to your credit score and warns you of any unusual activity that might have an impact on it.
Timing Your Mortgage Application
Work on raising your credit score well in advance of when you intend to apply for a mortgage, as it takes time. Try to start half a year or more in advance. You have this window of time to make adjustments and observe how they improve your credit score.
It's crucial to improve your credit before applying for a mortgage in order to get the best potential loan conditions. You can raise your creditworthiness and chances of acceptance by being aware of the elements that affect your credit score and taking proactive measures to raise it. Your REALTOR® and your lender can also provide helpful ways to make sure that your credit is in a place to get you the most favorable terms for your mortgage.
From the Louisiana Department of Insurance: During a press conference today with Governor Jeff Landry, Insurance Commissioner Tim Temple announced that registration for the next round of the Louisiana Fortify Homes Program (LFHP) will open at 8 a.m. on Monday, June 1, and will include 3,000 grants. The registration period for this lottery will be open for three weeks, closing at 5 p.m. on Friday, June 19. During the press conference, Gov. Landry signed HB 1187 by Rep. Paul Sawyer, which will allow Louisiana Citizens Property Insurance Corporation to transfer $50 million in additional Katrina bond assessment funds to the LFHP. Combined with the $30 million in funding the program will receive through taxes and fees on insurance entities, the LFHP will receive a total of $80 million this year. “By lowering overall losses, we can reduce insurance and reinsurance costs, draw more insurers into the market, motivate existing companies to write additional policies and lower insurance premiums,” said Commissioner Temple. “That is exactly what the Louisiana Fortify Homes Program is designed to do.” The list of coastal parishes that are eligible to participate is expanding to include Acadia, Jefferson Davis and Lafayette parishes. Additionally, homeowners who live in the portions of Ascension, Calcasieu, Iberia, Livingston, St. Martin, St. Tammany, Tangipahoa and Vermilion parishes that were previously not included in the program will now be eligible to participate. A map showing the full list of eligible parishes is available on FortifyHomes.La.Gov . “Louisiana is the fastest growing state in the country for Fortified roofs, and that growth is not by accident—it is the result of strong support from Governor Landry and legislators like Chairman Talbot, Chairman Firment and Representative Sawyer, targeted program design, and a clear recognition that strengthening homes is one of the most effective ways to reduce insurance losses,” said Commissioner Temple. “At the end of the day, this program is about more than just roofs. It is about protecting families, it is about strengthening communities, and it is about putting Louisiana in a stronger position—both physically and economically—to face the challenges ahead.” To participate in the lottery, homeowners must register during the June registration period. Homeowners who registered for a previous round but were not selected must register again to participate. People who register on the last day of the registration period have the same chance of being selected as those who register on the first day, so there is no need to rush to register as soon as the period opens. When registering, homeowners will need to upload their homestead exemption, insurance policy declarations page that includes wind coverage, and flood insurance declarations page if the residence is in a flood zone. Homeowners who need assistance obtaining a copy of their homestead exemption should contact their parish tax assessor. Homeowners can contact their homeowners and flood insurance companies or agents for a copy of their policy declarations page. Homeowners are required to create a profile in the LFHP system before registering for the lottery and may do so by visiting the LFHP website and clicking the Login button. Homeowners who previously created a profile may use the same one for this and future rounds. Once the lottery registration period closes, the LFHP will randomly select 3,000 participants and send email notifications to registrants about whether they were selected to participate. These selection notices will be sent via email beginning on Monday, June 22. There are several program requirements that homeowners should be aware of before registering. Those interested in the program are encouraged to review eligibility information and frequently asked questions at FortifyHomes.La.Gov to determine whether their home meets the requirements for the program. If selected to participate in the grant program, homeowners will be financially responsible for having the home evaluated by a FORTIFIED-certified Evaluator as well as costs for the roof upgrade including permits, inspections and construction costs beyond the amount of the grant The LFHP provides grants of up to $10,000 for homeowners to upgrade their roofs to standards set by the Insurance Institute for Business & Home Safety. The program helps Louisiana homeowners strengthen their roofs to better withstand hurricane-force winds.
Learn how real estate agents can educate buyers about Louisiana homeownership costs, including taxes, insurance, HOA fees, and maintenance.
The 2026 Regular Legislative Session has officially adjourned, and Louisiana REALTORS® closes the session with a strong record of legislative wins, defensive victories and meaningful progress on issues that directly impact property owners, homebuyers, housing providers and real estate professionals across Louisiana. This session touched nearly every major pressure point in the real estate market: insurance affordability, transaction transparency, appraisal certainty, leasing law, property taxes, blight redevelopment, litigation costs, consumer protection and private property rights. Louisiana REALTORS® successfully advanced several major policy priorities this session, including residential wholesaling reform, vacant residential land disclosure, appraisal certainty, security deposit reform, insurance mitigation funding and redevelopment tools for blighted property. At the same time, the association helped stop or reshape proposals that would have harmed housing supply, increased practitioners' liability, or created uncertainty for property owners and housing providers. Major Wins for You and Real Estate Residential Wholesaling Reform The signature victory of the session was HB 468 by Rep. Troy Hebert , Louisiana REALTORS®’ residential wholesaling reform bill. For years, residential wholesaling operated in a gray area of Louisiana law. HB 468 creates a clear statutory framework for residential wholesaling, strengthens consumer protection, increases transparency, and gives the Louisiana Real Estate Commission meaningful enforcement authority. The bill’s conference report passed unanimously in both chambers, with votes of 94-0 in the House and 35-0 in the Senate. This is a major structural reform for Louisiana real estate law. This bill will be state law effective August 1, 2026. Please note that the law does not affect any wholesale contracts between now and the effective date. Vacant Residential Land Disclosure HB 1166, by Rep. Kim Carver, passed the Legislature and has been sent to the Governor for his signature. The bill addresses disclosure gaps in vacant residential land transactions where buyers may discover late-stage issues involving access, utilities, drainage, flood risk, prior use or other material facts. HB 1166 creates a clearer process for buyers, sellers and real estate practitioners, and should help reduce failed transactions, disputes and closing-table surprises. As new industry forms and disclosures are developed, Louisiana REALTORS® will monitor the process closely and work to ensure the final requirements are practical, clear and consistent with sound industry practice. The Louisiana Real Estate Commission will complete the forms and disclosure process, with final implementation expected to be legally required for agents beginning January 1, 2027. Appraisal Liability Protections Louisiana REALTORS® secured two important appraisal-related wins. HB 1027 also by Rep. Troy Hebert , signed as Act No. 187 , clarifies that appraisers should not be held liable for compliance with obligations that belong to other parties in the transaction. HB 300 by Rep. Neil Riser , signed as Act No. 149 , addresses appraisal thresholds for bank-owned property. Together, these measures support greater transaction certainty and fairness in the appraisal process. The pair of these measures will take effect as law on August 1, 2026. Housing & Market Stability Security Deposit Reform HB 292, by Rep. Delisha Boyd and signed by Governor Landry as Act No. 63 , creates a more workable process for addressing damage discovered at the end of a lease and provides greater flexibility through written agreements regarding security deposit timelines. The measure offers practical clarity for housing providers, tenants and property managers when property damage is identified after move-out, allowing additional time to assess damage, obtain repair estimates and document costs before final security deposit accounting is completed. By creating a clearer statutory framework, the law helps reduce disputes and ensures that both landlords and tenants have a better understanding of their rights and responsibilities. Property managers can mark August 1, 2026, on their calendars, as that is the effective date for this legislation. Protections for Victims & Landlords HB 297, by Rep. Mandie Landry and signed by Governor Landry as Act No. 64 , expands Louisiana's early lease-termination protections to include victims of stalking and cyberstalking. The law recognizes that personal safety may require a tenant to leave a residence before the end of a lease term. To exercise these protections, a tenant must provide documentation from a qualified third party or other authorized evidence demonstrating that they are a victim of stalking or cyberstalking and that continued occupancy would present a safety concern. The measure also clarifies and expands who may serve as a qualified third party for purposes of supporting a tenant's request. These changes will take effect into law on August 1, 2026. Insurance Affordability and Mitigation Insurance affordability remained one of the most significant issues facing Louisiana homeowners and the real estate market. HB 1187 by Rep. Paul Sawyer , signed by Governor Landry as Act No. 416 , transfers an additional $50 million in Katrina bond assessment funds to the Louisiana Fortify Homes Program. Combined with other insurance-related funding, the program reaches approximately $80 million for the year. The Fortify Homes Program remains one of Louisiana’s most direct tools for reducing property risk, strengthening homes, improving market stability, and placing downward pressure on insurance costs over time. Several additional insurance measures did not reach final passage, including legislation on fortified roof endorsements, nonrenewal protections for homeowners who mitigate risk, and a pre-suit review process for residential property insurance disputes. These remain important long-term priorities. This became law and took effect upon the Governor’s signature. Blight, Redevelopment, and Property Taxes Louisiana REALTORS® supported policies this session aimed at returning neglected property to productive use and strengthening property-tax fairness. HB 214 by Rep. Chance Henry , now Act No. 272 with Governor Landry’s signature, will appear on the ballot as a constitutional amendment authorizing an optional property tax exemption for rehabilitated blighted or derelict property. HB 217, also by Rep. Chance Henry , is the enabling legislation for HB 214 and has received the Governor’s signature, becoming Act No. 422. Together, these measures would give local governments another tool to encourage private investment, neighborhood revitalization, and redevelopment. SB 180 , now Act No. 39 , will also appear on the ballot. The measure allows the surviving spouse of a deceased veteran with a service-connected disability to transfer an expanded property tax exemption. This is both a property-tax fairness measure and a homeownership stability measure for Louisiana veterans’ families. If passed in the fall election, the measures would take effect on January 1, 2027, as well as SB 180. Defensive Victories Some of the most important wins in this session came from stopping harmful legislation before it became law. Rent Stabilization Stopped Twice HB 472 by Rep. Alonzo Knox , the rent price control bill, was stopped after being involuntarily deferred. Louisiana REALTORS® opposed the bill and provided testimony in committee because rent-control policies can discourage investment, reduce housing supply, create uncertainty for housing providers and ultimately worsen affordability challenges. Knox brought the bill to the House Committee on Municipal, Local and Parochial Affairs twice due to the opposing testimony of our organization and opposition from the Home Builders Association and the Louisiana Apartment Association. Hidden Fees Bill Reshaped Yet Still Thwarted HB 617 by Rep. Mandie Landry , the hidden fees bill, raised concerns because it could have imposed liability on real estate professionals for fees they do not control, including those set by lenders, title companies, insurers, government entities and other third parties. Louisiana REALTORS® successfully negotiated a House-side amendment exempting real estate transactions from the bill’s scope. The bill later died in the Senate Commerce Committee. It is worth noting that the author agreed to include us in an amendment by Rep. Troy Hebert from the House floor, exempting real estate transactions. Automatic Renewal Bill Monitored HB 750, by Rep. Vincent Cox, addressing automatic renewal provisions, was closely monitored by Louisiana REALTORS® to ensure the legislation did not unintentionally apply to residential or commercial leases, property management agreements, association operations, nonprofit activities or standard real estate practices. Those concerns were successfully addressed through a Louisiana REALTORS® amendment offered by Senator Pressly during Senate consideration. When the bill returned to the House, Rep. Cox accepted the amendment and supported concurrence, preserving the bill's consumer protection goals while ensuring Louisiana's real estate industry, housing providers, associations and nonprofits were not subjected to unintended regulatory burdens . Missed Opportunities Two broader legal reform measures passed the House but stalled in the Senate Judiciary A Committee. HB 437, by Rep. Michael Melerine, addressing expert witness fees, and HB 1089, by Rep. Dennis Bamburg, establishing CARE Accounts, both reflected broader efforts to reduce litigation costs, improve Louisiana’s legal climate, and address cost drivers affecting insurance affordability and business competitiveness. Their failure to reach final passage was a missed opportunity, but the issues remain central to Louisiana’s long-term affordability conversation. Louisiana REALTORS® will continue to monitor these proposals and hope to see similar reforms return next session with a different outcome. What Comes Next The end of the session does not end the work. Louisiana REALTORS® will now turn to implementation, member education, ballot engagement and preparation for the next legislative cycle by directly engaging you, the driving force behind all of our efforts. The issues that shaped this session — housing affordability, insurance availability, redevelopment, legal costs, and private property rights — are not going away. Neither are we. Louisiana REALTORS® remain committed to serving as a consistent, credible and effective voice for property owners, homebuyers, housing providers and real estate professionals across Louisiana. Thank You As the Legislature adjourns, Louisiana REALTORS® expresses sincere appreciation to the leadership, members, public officials and advocacy partners who helped make this a productive and successful session for the real estate industry and property owners across Louisiana. We are especially grateful to Louisiana REALTORS® President Ginger Maulden, President-Elect David Favret, Treasurer Misty Ingersoll, Legislative Committee Director Keary Coffin, Outside General Counsel Eric Landry, LARPAC Chairwoman Marsha McGraw-Barbera, the Louisiana Real Estate Commission Commissioners and Executive Team, and the members of the Louisiana REALTORS® Legislative Committee for their leadership, guidance, resources and engagement throughout the session. We also extend a special thank you to those who attended this session’s REALTOR® Day and helped strengthen our presence at the Capitol. Your participation amplified our ability to advocate with one united voice when it mattered most. We further extend our appreciation to the legislators and partners who worked alongside us this session, including Rep. Troy Hebert, Rep. Kim Carver, House Commerce Chairman Daryl Deshotel, Rep. Delisha Boyd, Rep. Stephanie Hilferty, Rep. John Wyble, Sen. Beth Mizell, Sen. Greg Miller, Speaker Phillip DeVillier, Senate President Cameron Henry and Governor Jeff Landry for their leadership, accessibility and commitment to addressing issues impacting housing, property rights, insurance affordability, redevelopment and Louisiana’s economic future. Strong policy outcomes are only possible through collaboration, professionalism and sustained engagement. Louisiana REALTORS® remains grateful for the relationships and partnerships that helped move meaningful legislation across the finish line this year. Please view the session wrap-up tracking report provided by our lobbying team over at Harris, DeVille and Associates.
