If you’re hitting some roadblocks getting approved for a mortgage, you’re not alone. Your credit score is one of the biggest factors lenders evaluate when determining whether to approve your home loan and what interest rate you’ll receive. The good news? With the right strategy, many borrowers can see meaningful credit score improvements within a few months.
Results vary significantly based on individual credit history and other factors. Consider consulting a financial advisor for personalized guidance.
TOPICS COVERED:
- Understanding What Impacts Your Credit Score
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Top Steps to Improve Your Credit Score Before Buying a House
- Request a Credit Limit Increase
- Make Multiple Payments Throughout the Month
- Lower Your Credit Utilization Ratio
- Don’t Close Old Credit Cards
- Pay Every Bill On Time
- Become An Authorized User
- Check Your Credit Reports for Errors
- Bonus: Know Your Debt-to-Income (DTI) Ratio
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Final Thoughts
Understanding What Impacts Your Credit Score
Most FICO® Scores are based on five key factors:
- Payment History (35%)
- Amounts Owed/Credit Utilization (30%)
- New Credit (10%)
- Length of Credit History (15%)
- Credit Mix (10%)
Some factors are easier to improve than others. For example, the length of your credit history can’t be changed quickly, but payment history and credit utilization make up 65% of your score and can often be improved in a matter of months.
Top Steps to Improve Your Credit Score Before Buying a House
If you’re planning to apply for a mortgage in the next 3–6 months, these are some of the fastest and most effective ways to improve your score.
Request a Credit Limit Increase
One of the easiest ways to lower your credit utilization ratio is to request a credit limit increase on your existing credit cards. If approved, your available credit increases while your balance stays the same, instantly lowering utilization. Many card issuers offer credit limit reviews without a hard inquiry.
Make Multiple Payments Throughout the Month
Instead of making a single payment on the due date, consider making smaller payments every time you get paid.
Why? Credit card companies typically report balances to the credit bureaus around your statement closing date. Keeping balances low throughout the month can help a lower utilization ratio appear on your credit report.
Lower Your Credit Utilization Ratio
Credit utilization measures how much of your available revolving credit you’re using.
For example, if you have a $10,000 credit limit and carry a $1,000 balance, your utilization ratio is 10%.
While experts generally recommend staying below 30%, borrowers with the highest credit scores often keep their utilization below 10%.
Here are a few ways to reduce utilization:
- Calculate your current utilization ratio.
- Shift more purchases to a debit card if possible.
- Pay down existing balances aggressively.
- Reduce discretionary expenses like subscriptions, dining out, and impulse purchases.
- Focus on paying down cards with the highest utilization first.
Don’t Close Old Credit Cards
Even if you rarely use an older credit card, keeping it open may help your score.
Closing a card can:
- Reduce your available credit.
- Increase your utilization ratio.
- Potentially hurt the average age of your accounts over time.
If the card has no annual fee, it may be beneficial to keep it open while preparing for a mortgage application.
Pay Every Bill On Time
Payment history carries the most weight in your credit score calculation. A single late payment can significantly impact your score, while consistently making on-time payments demonstrates reliability to lenders.
Set up
- Automatic payments
- Calendar reminders
- Account alerts
If you’ve fallen behind, becoming current and staying current is one of the most important steps you can take before applying for a mortgage.
Become an Authorized User
If a trusted family member has a long-standing credit card with excellent payment history and low utilization, being added as an authorized user could help strengthen your credit profile.
This strategy works best when the primary cardholder has:
- A long account history
- Low balances
- No late payments
Not all situations produce the same results, but it can be a useful tool for some borrowers.
Check Your Credit Reports for Errors
Before applying for a mortgage, review your credit reports from Equifax, Experian, and TransUnion.
Errors such as:
- Incorrect late payments
- Duplicate accounts
- Fraudulent activity
- Outdated information
could unnecessarily lower your score. The Consumer Financial Protection Bureau recommends checking your reports regularly and disputing inaccuracies.
Bonus: Know Your Debt-to-Income (DTI) Ratio
While your debt-to-income ratio does not impact your credit score, it plays a major role in mortgage approval.
DTI compares your monthly debt payments to your gross monthly income. A lower DTI generally makes you a more attractive borrower and may improve your mortgage options.
Final Thoughts
Improving your credit score before buying a home doesn’t have to take years. For many future homeowners, the biggest wins come from lowering credit card utilization, making every payment on time, avoiding new debt, and correcting credit report errors. By focusing on these key areas for just a few months before applying, you may qualify for better mortgage rates and improve your chances of approval.
Planning to buy a home soon? Start by checking your credit utilization and payment history today. These are two important factors used in many credit scoring models, and addressing issues in these areas may help strengthen your credit profile over time.
Homeownership Resources
At Core Bank, we want you to feel confident in whatever stage of homeownership you’re in. Whether you’re considering buying, getting ready to sell, or just upgrading your space, our mortgage team of professionals is ready to assist you.
