Your credit score is one of the most important factors lenders consider when you apply for a mortgage. A higher score can mean lower interest rates, better loan options, and thousands of dollars in savings over the life of your loan.
If you’re planning to buy a home soon, here are proven steps to boost your credit score before applying for a mortgage.
1. Check Your Credit Report for Errors
Mistakes on credit reports are more common than you think. Errors like duplicate accounts, incorrect balances, or outdated information can drag down your score.
✅ Action Step: Request free copies of your credit reports from AnnualCreditReport.com and dispute any inaccuracies.
2. Pay Down Credit Card Balances
Credit utilization—the percentage of available credit you’re using—makes up about 30% of your score. Keeping balances high signals risk to lenders.
✅ Action Step: Aim to keep utilization under 30%, and ideally below 10%, on each card.
3. Avoid Opening New Credit Accounts
Every new credit application triggers a hard inquiry, which can temporarily lower your score. Lenders also see too many new accounts as risky.
✅ Action Step: Hold off on opening new credit cards, car loans, or financing plans until after your mortgage closes.
4. Pay Bills on Time—Every Time
Payment history is the single biggest factor in your credit score, making up about 35%. Even one late payment can hurt your score significantly.
✅ Action Step: Set up automatic payments or reminders to ensure you never miss a due date.
5. Don’t Close Old Accounts
The length of your credit history also matters. Closing old accounts can shorten your average account age and hurt your score.
✅ Action Step: Keep older accounts open and active, even if you rarely use them.
6. Become an Authorized User
If you have a trusted family member with good credit, being added as an authorized user on their card can boost your score by improving your credit history and utilization ratio.
7. Diversify Your Credit Mix
Lenders like to see you can handle different types of credit (installment loans, credit cards, etc.). While you shouldn’t take on unnecessary debt, a healthy mix can help.
8. Time Your Mortgage Application Wisely
Credit score improvements don’t happen overnight. It can take 3–6 months (or longer) to see significant results.
✅ Action Step: Start improving your credit as early as possible before applying for a mortgage.
Why It Matters
Here’s how much your credit score can affect your mortgage rate:
- Excellent (740+): Qualify for the lowest rates
- Good (680–739): Competitive rates, but slightly higher
- Fair (620–679): Higher rates and fewer loan options
- Poor (<620): Difficult to qualify without government-backed programs
Final Thoughts
Boosting your credit score before applying for a mortgage is one of the smartest financial moves you can make. By paying down debt, correcting errors, and building strong credit habits, you’ll not only improve your approval odds but also save thousands over the life of your loan.
👉 Pro Tip: Small improvements can make a big difference. Even raising your score by 20–40 points could unlock better rates and lower monthly payments.