Credit Tips for Homebuyers
Practical, actionable steps to help improve your credit before you apply for a mortgage. Small changes now can make a real difference in your rate and loan options later.
Check your credit reports for errors
Pull your credit reports from all three bureaus (Equifax, Experian, and TransUnion) and review them closely. Incorrect late payments, accounts that aren't yours, or outdated information can drag your score down unnecessarily - and errors are more common than you'd think.
Pay down credit card balances
How much of your available credit you’re using - your credit utilization - is one of the biggest factors in your score. Paying down revolving balances, even before your statement closes, can help your utilization (and your score) improve relatively quickly.
Keep making on-time payments
Payment history is the single biggest factor in most credit scoring models. Setting up autopay for at least the minimum due on every account helps make sure a missed payment doesn’t undo other progress you’re making.
Avoid opening new credit accounts
Each new credit application can cause a small, temporary dip in your score, and a new account lowers your average account age. In the months leading up to applying for a mortgage, it’s best to hold off on financing a car, opening new credit cards, or other new credit unless truly necessary.
Don't close old credit cards
It can be tempting to close cards you no longer use, but doing so can shorten your average account age and reduce your total available credit - both of which can work against your score. Consider keeping old accounts open, even with a small or no balance.
Address collections and past-due accounts
If you have any accounts in collections or past due, work on getting current or resolving them. Depending on the loan program, resolving certain outstanding debts may also directly affect your qualification, not just your score.
Give it time
Meaningful credit improvement usually takes a few months, not a few days. If you’re planning to buy in the next six to twelve months, starting these habits now gives your score real time to reflect the changes.
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