8 Ways to Improve Your Credit Before Buying a Home

(6-minute read)

If buying a home is on your horizon, your credit deserves attention well before you begin touring properties. A stronger credit profile may improve your financing options and could help you qualify for a more favorable interest rate. However, there is no single score that guarantees mortgage approval. Lenders also consider income, employment, debts, assets, down payment, the property and the loan program.

Most consumer credit scores use a 300-to-850 range, but you have more than one score. The number may vary by credit bureau, scoring model and the date it was calculated. Mortgage lenders commonly review information from Equifax, Experian and TransUnion, so a score from a banking app may not match the score used for a home loan.

The good news is that sound credit habits are usually straightforward. They simply require time and consistency. If you hope to purchase a home in 2026 or beyond, these eight steps can help you prepare.

1. Review all three credit reports early

Begin at AnnualCreditReport.com, the federally authorized source for free reports from Equifax, Experian and TransUnion. Free online reports are currently available weekly. Review each one because the information can differ among bureaus.

Look for accounts you do not recognize, incorrect late payments, duplicate debts, outdated balances and errors in your identifying information. A credit report is not the same as a credit score: the report contains the account history used to help calculate scores.

Checking your own report is a soft inquiry and does not lower your score. Ideally, review your reports several months before applying for a mortgage. That gives you time to investigate problems and establish better habits without expecting an overnight transformation.

2. Dispute genuine errors

If you find inaccurate information, dispute it with the credit reporting company and contact the business that supplied the data. Keep copies of supporting documents and correspondence. The Consumer Financial Protection Bureau provides instructions and sample letters for credit-report disputes.

Only inaccurate or unverifiable information should be disputed. Accurate negative information generally cannot be removed simply because it is unfavorable. Be wary of a company promising a new credit identity or the guaranteed removal of legitimate items for an upfront fee.

3. Pay every bill on time

Payment history is the largest category in a typical FICO Score calculation. Even one missed payment can matter, and the effect depends on factors such as how late the payment becomes and the rest of your credit file.

Use automatic payments, calendar reminders or account alerts to reduce the chance of an oversight. At minimum, schedule the required payment by the due date and make certain the payment account has enough funds.

If you are already behind, contact the creditor promptly to discuss available options. Bringing an account current will not erase its history, but it prevents the delinquency from continuing to worsen.

Remember that mortgage underwriting examines more than accounts appearing on a standard credit report. Rent, utilities, taxes, support obligations and other recurring commitments also deserve timely attention.

4. Lower credit-card balances

Credit-scoring models consider revolving utilization—the percentage of your available credit being used. A card with a $5,000 limit and a $2,000 reported balance has 40% utilization. Models may consider both total utilization and the percentage used on individual cards.

Lower is generally better. The CFPB notes that experts commonly advise staying at or below 30%, but 30% is not a magic dividing line. People seeking score improvement may benefit from substantially lower reported balances. Paying in full is also the best way to avoid interest when the card has a grace period. You do not need to carry a balance or pay interest to build credit.

Because issuers usually report balances periodically, the balance on your credit report may be the statement balance rather than what you owe today. If you are preparing for a mortgage, ask your loan professional how timing additional payments might affect your application.

Avoid moving debt from card to card merely to disguise it. A balance transfer may carry fees and does not reduce the amount owed unless it is paired with a repayment plan.

5. Avoid new debt and major purchases before closing

A lender may check your credit when you apply and again before closing. Financing a vehicle, furniture, appliances or another large purchase can add a monthly obligation, raise card utilization or reduce the cash available for closing. Any of those changes may affect qualification.

Once you begin mortgage planning, consult your lender before:

• Opening a new account
• Increasing a credit-card balance
• Co-signing a loan
• Changing how you hold your cash
• Making an unusually large purchase

A preapproval is not a final loan approval, and final approval is not the same as a completed closing. The safest approach is to keep your finances steady through closing unless your lender advises otherwise.

6. Don’t open or close accounts casually

Opening credit can create a hard inquiry and reduce the average age of your accounts. Closing a card can shrink your available revolving credit, potentially increasing utilization. For those reasons, neither action should be automatic before a mortgage application.

The older advice that “too much available credit” necessarily lowers a score is misleading. Unused available credit is not itself the same as debt. Still, a lender may ask about recently opened accounts or other changes.

If a card has a high annual fee or creates a spending risk, there may be sound reasons to close it—just discuss the timing with a mortgage professional.

7. Shop for a mortgage within a focused period

Comparing lenders can save money, and credit-scoring models generally recognize that consumers shop for rates. According to the CFPB, inquiries for the same type of loan made within a 14-to-45-day span are generally treated as no more than one inquiry for scoring purposes. The precise window depends on the scoring model, and the inquiries can still appear separately on your reports.

To keep the process organized, gather your documents first and request quotes from multiple lenders during a concentrated period.

Compare Loan Estimates—not just advertised rates—and examine:

• The annual percentage rate
• Lender charges and points
• Mortgage insurance
• Projected monthly payment
• Cash needed to close

8. Choose credit products carefully

The name of a lender or type of financing does not automatically prove that someone manages money poorly. What matters is whether the account is affordable, paid as agreed and appropriate for the borrower.

Before accepting a consolidation loan, retail financing plan, buy-now-pay-later arrangement or another credit product, compare the APR, fees, payment schedule, promotional terms and total cost.

Consolidation can simplify payments, but it does not solve overspending and may cost more if repayment is stretched out. Never open an account solely to create a particular “credit mix.” Credit mix is only one part of a score, and unnecessary borrowing creates real cost and risk.

What influences a FICO Score?

FICO groups the information used in a typical score into five categories:

• Payment history: 35%
• Amounts owed: 30%
• Length of credit history: 15%
• New credit: 10%
• Credit mix: 10%

These percentages describe the general population and are not a formula for predicting how a particular action will change an individual score.

The most productive priorities are usually simple: pay on time, keep revolving balances manageable, apply for credit selectively and allow positive history to age. There is no legitimate instant fix.

What credit score do you need to buy a home?

There is no universal mortgage cutoff. Requirements vary by lender, loan program and the complete application.

A score around 620 is sometimes discussed in connection with conventional financing, but it is not a blanket standard for every borrower or product. Government-backed and portfolio programs may use different criteria, while lenders may add their own requirements. A higher score can expand your options, but credit alone does not determine approval or pricing.

If you are uncertain where you stand, speak with a reputable mortgage professional before assuming that you must wait—or that you are ready. Ask which mortgage credit scores and program rules apply to your situation, what documentation will be needed and which changes are most likely to help.

Then coordinate your financing with your real estate professional so your home search reflects a comfortable, supportable budget.

Two other articles from my blog that you may want to read:
🗞️ The Advantages of "Pre-Approval"
https://randy.rcarealestate.com/blog/30/The+Advantages+of+Preapproval
[This article includes a list of recommended mortgage lenders. Whichever of these professionals you contact, you can be confident that they will be experienced, knowledgeable, professional and helpful.]
🗞️ The Advantages of Being Represented by a "Buyer's Agent"
https://randy.rcarealestate.com/blog/43/A+BUYER'S+AGENT+SERVICES+TO+YOU 

Source credit and update note

Adapted and substantially updated for 2026 from “8 Ways to Improve Your Credit” and “5 Factors That Decide Your Credit Score,” pages 6–7 of Handouts for Consumers from REALTOR® Magazine Online, reprinted by permission of the National Association of REALTORS®, copyright 2005. ( I am continuing to republish tip sheets and blog posts that were lost in a computer problem a few years back. ChatGPT has assisted me with insuring th einformation is up to date.)

The original “8 Ways” handout credited the Fannie Mae Foundation publication Knowing and Understanding Your Credit. Current factual guidance was checked against the Consumer Financial Protection Bureau, AnnualCreditReport.com and myFICO.

This article is for general educational purposes and is not credit, lending, legal or financial advice. Mortgage requirements and individual results vary. 

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Randall C. (Randy) Anderson, REALTOR®/Agent 
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