Improving credit for a mortgage application

Buying a home is an exciting milestone, but if your credit score isn’t where it needs to be, getting approved for a mortgage can feel like an uphill battle. The good news? There are plenty of ways to improve your credit and boost your chances of securing a great loan. Here are some practical steps to help you get mortgage-ready.

1. Check Your Credit Report for Mistakes

Before making any big financial moves, get a copy of your credit report from all three major bureaus—Experian, Equifax, and TransUnion. Look for errors like incorrect account balances, late payments that were actually on time, or even fraudulent accounts. If you find anything suspicious, dispute it right away to get it corrected.

2. Make On-Time Payments a Habit

Your payment history is the biggest factor in your credit score, so paying your bills on time is crucial. Set up automatic payments or calendar reminders to avoid missing due dates. Even one late payment can hurt your score, so stay on top of it.

3. Lower Your Credit Card Balances

Your credit utilization—the percentage of your available credit that you’re using—should ideally be below 30%. If you’re carrying high balances, start paying them down. A quick trick? Make extra payments before your statement closing date so your reported balance stays low.

4. Avoid Taking on New Debt

Opening new credit accounts right before applying for a mortgage isn’t a great idea. Each new credit application triggers a hard inquiry, which can temporarily lower your score. Lenders also don’t want to see you racking up new debt right before they approve you for a home loan.

5. Keep Old Accounts Open

The length of your credit history matters, so don’t rush to close old credit cards—especially if they have a long, positive history. Even if you don’t use them often, keeping them open helps strengthen your credit profile.

6. Tackle Your Outstanding Debts

Lenders look at your debt-to-income (DTI) ratio when reviewing your mortgage application. Paying down existing loans—credit cards, student loans, or personal loans—can improve both your DTI and your credit score, making you a more attractive borrower.

7. Become an Authorized User

If you have a trusted friend or family member with a well-managed credit card, ask if they’ll add you as an authorized user. This can give your score a boost by adding their good payment history to your credit profile.

8. Consider a Secured Credit Card

If you have limited credit history or need to rebuild your score, a secured credit card can be a great stepping stone. Since these cards require a deposit, they’re easier to qualify for and can help you establish good credit habits over time.

9. Seek Help from a Credit Counselor

If debt feels overwhelming, a nonprofit credit counseling agency can help you create a plan to improve your financial situation. They’ll guide you on budgeting, debt repayment strategies, and ways to improve your credit score.

10. Be Patient and Stay Consistent

Raising your credit score doesn’t happen overnight, but small, consistent changes will make a big difference over time. Start working on your credit well before you plan to apply for a mortgage, and you’ll put yourself in the best position to get approved.

Improving your credit might take some effort, but it’s worth it. A strong credit score can mean lower interest rates, better loan terms, and an easier path to homeownership. Start making these changes today, and when the time comes to buy your dream home, you’ll be ready!

To obtain your credit report, you can start here