How to Improve Your Credit Score Before Buying a Home
If you're dreaming of homeownership but worried your credit score might hold you back—you’re not alone. As a mortgage lender, I work with a lot of homebuyers who ask me the same question:
“I pay my credit cards in full every month, and I still don’t have perfect credit. What am I doing wrong?”
The truth is, credit scores are complicated—but with the right strategy, they’re fixable. A higher score can mean a lower interest rate, more loan options, and thousands in savings over the life of your mortgage. This guide will walk you through how to improve your credit before buying a house—even if your credit isn’t perfect today.
Why Your Credit Score Matters When Buying a Home
Mortgage lenders use your credit score to determine your risk as a borrower. The higher your score, the more likely you are to qualify for a mortgage—and the better your terms will be.
If you’re not sure why credit matters so much, check out this article on Why Your Credit Score Matters When Buying a House.
A difference of just 20–40 points could mean:
- A lower interest rate
- A higher loan approval amount
- Access to more loan programs, including first-time buyer perks
What Impacts Your Credit Score?
Understanding how your score is calculated is the first step. Here's the breakdown:
- 35% – Payment history (on-time payments)
- 30% – Credit utilization (revolving balances)
- 15% – Length of credit history
- 10% – Credit mix (types of credit)
- 10% – New credit/inquiries
When applying for a mortgage, credit cards carry extra weight, making up 65%–75% of your total score composition.
Also, if the score you're seeing on Credit Karma or your banking app doesn’t match your mortgage score, you’re not crazy—there’s a reason for that. Read more in our article Why Your Credit Karma Score Doesn’t Match Your Mortgage Score.
The Truth About Credit Cards (Even If You’re a Dave Ramsey Fan)
Some buyers avoid credit cards altogether, following advice from experts like Dave Ramsey who say “debt is dumb.” And while Dave has great budgeting tips, when it comes to building credit for a mortgage, not using credit cards can actually hurt you.
Credit cards—when used responsibly—are one of the most powerful tools for improving your score. If you don’t have one, you might be missing out on dozens of extra points, which could mean a higher interest rate on your loan.
Smart Credit Card Habits That Raise Your Score
The balance on your monthly credit card statement is what gets reported to the credit bureaus and is how your score is calculated.
- Keep balances low: Under 50% of your limit, ideally under 30%, best under 10%
- Pay early: Make payments 2–3 days before the statement cycles (leave a small balance, preferrably 10% of the credit limit)
- Use old or inactive cards: A dormant card doesn’t help your score
- Don’t close paid-off cards: Age of credit matters
- Request a credit limit increase: Lowers utilization without making a payment
What NOT to Do Before Applying for a Mortgage
In the 3–6 months leading up to your mortgage application, avoid:
- Opening new credit cards or auto loans
- Closing old accounts
- Making late payments—even one 30-day late can drop your score by 80–100 points
- Applying for store cards or “buy now, pay later” offers
Should You Pay Off Collections or Charge-Offs?
Not always. Here’s why:
- Paying old collections can update the date of last activity to recent on derogatory accounts and lower your score
- Focus on collections with recent reporting dates
- Try negotiating a “pay for delete”—have it removed from your report entirely
- Talk to your loan officer first before paying anything
Why You Need to Resolve Credit Disputes
Many buyers don’t realize it, but you cannot close on a mortgage with active credit disputes.
Disputed accounts are ignored in scoring, which may temporarily boost your score—but lenders see through that. Once the dispute is resolved, your score could drop again.
Clear up any disputes early, before starting the mortgage process.
Don’t Stress About Inquiries
Contrary to popular belief:
- Hard inquiries only reduce your score by 2–5 points each
- Multiple loan inquiries of the same type (e.g. all mortgage related) within 14 days count as one inquiry, not multiple inquiries
- Soft pulls (like checking your own score) do not impact your credit at all
Final Steps Before You Get Pre-Approved
Every credit report is different. Some situations take longer to fix—but others can be resolved in as little as a week. Every borrower and every credit report is different so timelines and action plans can vary.
If you're concerned about credit, here’s what you should do:
- Talk to a loan officer
- Request a soft credit pull to review your situation without impacting your score
- Build a custom credit improvement plan based on your timeline and budget
- Let your lender decide if a rapid rescore is right for you
The Bottom Line
Improving your credit score before buying a home is one of the smartest things you can do. The right advice—and the right plan—can save you thousands on your mortgage.
You don’t have to figure it out alone.
At Resolute Lending, we work with buyers every day to help them qualify faster and smarter.
📞 Ready to get started?
Contact us today for a free credit review and personalized mortgage plan to help you move one step closer to homeownership.