How to Improve Your Credit Score Before Buying a Home

J Franklin Lloyd
Jun 4
4 min read

Your credit score plays a huge role in determining whether you qualify for a mortgage and what interest rate you’ll get. A higher credit score can save you thousands of dollars over the life of your loan by helping you secure a lower rate.

If you’re planning to buy a home soon, here’s how to boost your credit score quickly and effectively before applying for a mortgage.

1. Check Your Credit Report for Errors 🔍📄

Before anything else, you should review your credit report for mistakes that could be hurting your score.

✅ Get a Free Credit Report – You’re entitled to one free report per year from each of the three major credit bureaus: Experian, Equifax, and TransUnion. Visit AnnualCreditReport.com to request yours.✅ Look for Errors – Check for incorrect late payments, accounts you don’t recognize, or inaccurate balances.✅ Dispute Errors – If you find an error, file a dispute with the credit bureau to have it corrected.

💡 Pro Tip: Even a small error can impact your score, so fix any discrepancies as soon as possible.

2. Pay Bills on Time (Biggest Impact on Your Score!) ⏳💳

Your payment history makes up 35% of your credit score—making it the most important factor in improving your score.

✅ Set Up Automatic Payments – Never miss a due date by automating bills.✅ Pay at Least the Minimum – If you can’t pay the full balance, make at least the minimum payment to avoid late fees.✅ Catch Up on Late Payments – If you’ve missed payments, get current as soon as possible to start rebuilding your score.

💡 Pro Tip: One 30-day late payment can drop your credit score by 60-100 points, so prioritize on-time payments!

3. Lower Your Credit Utilization (Keep It Below 30%) 📉🔢

Your credit utilization ratio is the percentage of available credit you’re using. Keeping it below 30% can increase your credit score quickly.

✅ Pay Down Credit Card Balances – Aim to use no more than 30% of your credit limit (e.g., if you have a $10,000 limit, try to keep your balance under $3,000).✅ Request a Credit Limit Increase – If you have a good payment history, ask your credit card issuer for a higher limit—this lowers your utilization ratio instantly.✅ Make Multiple Payments a Month – Paying off small chunks before your due date keeps your balance low.

💡 Pro Tip: The lower your utilization ratio, the better! Keeping it under 10% can help you get the best mortgage rates.

4. Avoid Opening New Credit Accounts 🚫💳

Opening a new credit card or loan before applying for a mortgage can hurt your credit score in the short term.

✅ Avoid Hard Inquiries – New credit applications result in hard inquiries, which can drop your score by a few points.✅ Keep Old Accounts Open – The length of your credit history affects your score, so don’t close old credit cards.✅ Focus on Existing Accounts – Use and pay off your current credit responsibly.

💡 Pro Tip: If you must open a new account, do it at least 6-12 months before applying for a mortgage to give your score time to recover.

5. Reduce Your Debt-to-Income Ratio (DTI) 💰📉

Lenders look at your debt-to-income ratio (DTI) to determine if you can afford a mortgage. A lower DTI improves your chances of getting approved and securing better loan terms.

✅ Pay Off Credit Card Debt – This reduces your monthly debt obligations and improves your DTI.✅ Avoid Taking on New Debt – Don’t finance a new car or personal loan before applying for a home loan.✅ Increase Your Income – If possible, pick up a side hustle or negotiate a raise to improve your ratio.

💡 Pro Tip: Most lenders prefer a DTI of 36% or lower, though FHA loans allow up to 43%-50% in some cases.

6. Become an Authorized User on a Well-Managed Account 🔄👥

If you have a family member or close friend with a long credit history and good payment record, ask if they can add you as an authorized user on their credit card.

✅ Inherit Their Good Credit – Their positive history appears on your credit report.✅ Boost Your Credit Age – If their account is several years old, it extends your credit history.✅ No Responsibility for Payments – You don’t need to use the card—just being on the account helps.

💡 Pro Tip: Make sure the primary cardholder pays on time—otherwise, their missed payments can hurt your score!

7. Use a Credit-Boosting Program 🚀🔄

Several tools can increase your credit score quickly by adding positive payment history to your credit report.

✅ Experian Boost – Adds your utility, streaming, and phone bill payments to your credit history.✅ Self Credit Builder Loan – Helps build credit while saving money.✅ Rent Reporting Services – Programs like RentTrack or LevelCredit add your rent payments to your credit file.

💡 Pro Tip: These services won’t fix bad credit instantly, but they can help boost your score if you have limited credit history.

8. Avoid Making Major Financial Moves Before Closing 🚨🏡

Once you’ve been pre-approved for a mortgage, be extra careful with your finances.

🚫 Don’t apply for new credit cards or loans.🚫 Don’t make large purchases on credit.🚫 Don’t quit your job or reduce your income.

💡 Pro Tip: Lenders will recheck your credit before closing, so keep your finances steady until you officially own the home.

How Long Does It Take to Improve Your Credit Score? ⏳📈

✔ Fixing errors on your report – 30 to 60 days✔ Paying down debt – 1 to 3 months✔ Building a strong payment history – 6 to 12 months✔ Recovering from late payments – 12 to 24 months

The sooner you start improving your credit, the better your mortgage options will be!

Final Thoughts

A higher credit score = lower interest rates and better loan terms when buying a home. By following these steps now, you’ll set yourself up for home-buying success and save money in the long run.