17 strategies to improve your credit score before applying for a mortgage
Improving your credit score before applying for a mortgage can significantly impact your financial future. This article presents practical strategies, backed by expert insights, to help boost your credit rating. From managing credit card balances to addressing inaccuracies in your credit report, these tips offer a comprehensive approach to enhancing your creditworthiness.
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- Pay Down Credit Card Balances
- Strategically Reduce Credit Utilization
- Schedule Timely Payments for Score Boost
- Clear Small Debts for Big Impact
- Manage Buy Now Pay Later Accounts
- Lower Credit Card Utilization Below 30%
- Time Payments to Minimize Reported Balances
- Implement the Do Not Disturb Rule
- Contest Inaccurate Credit Report Entries
- Maintain Low Credit Utilization Consistently
- Stop Using Credit Cards Temporarily
- Settle Debts and Increase Credit Limits
- Build Credit with Small, Manageable Loans
- Keep Cards Open While Reducing Balances
- Negotiate Better Terms with Higher Scores
- Pay Full Credit Card Balance Monthly
- Reduce Credit Utilization
Pay Down Credit Card Balances
One of the most effective steps I took to improve my credit score before applying for a mortgage was paying down my credit card balances and managing my utilization ratio. Credit utilization refers to the percentage of available credit that you are currently using, and it is a major factor in determining your credit score. For instance, if I had a total credit limit of $10,000 across all my cards and I was carrying a balance of $5,000, that meant my utilization was at 50%.
Lenders tend to view that as risky because it suggests you may be over-reliant on credit. To improve my situation, I made it a goal to reduce my balances significantly, bringing my utilization below 30%, and ideally closer to 10%. I created a plan to pay more than the minimum every month, focused extra payments on the card with the highest balance, and avoided adding new purchases while I was preparing for the mortgage application.
Within just a few months, my credit score rose noticeably. Since payment history and utilization together make up the largest part of a credit score, keeping balances low showed lenders that I was financially responsible and not overextended. I also made sure to pay all bills on time, because even a single late payment can set back your score for months.
The improvement in my credit score directly affected the mortgage options available to me. Mortgage lenders look closely at credit scores to decide not only whether to approve you but also what interest rate to offer. Even a difference of 20-40 points in your score can shift you into a better credit tier. For example, let’s say someone with a score of 660 might be offered a 30-year fixed mortgage rate at 7.2%, while someone with a 720 score could get closer to 6.6%. On a $250,000 loan, that difference in rates could lower the monthly payment by over $100 and save more than $35,000 in interest over the life of the loan. By raising my score, I was able to qualify for lower interest rates, which made my monthly payments more affordable and freed up money for other priorities like home repairs, savings, or investments.
Improving my credit score gave me peace of mind and confidence during the mortgage process. Instead of worrying about whether I would even be approved or forced into higher-cost options, I could focus on finding the right home and negotiating from a stronger position. A few months of disciplined effort in managing credit can translate into decades of savings and stability.
Loretta Kilday, DebtCC Spokesperson, Debt Consolidation Care
Strategically Reduce Credit Utilization
I personally was house hunting in 2014 prior to becoming a broker. I had a credit score of 680 because I had used credit cards irresponsibly when in college. I knew that mortgage rates tier quite considerably at certain levels since I had studied it in my finance courses at San Diego State.
My action plan was simple but required discipline: I had been using a credit card the most, and I paid the balance off, bringing the utilization rate from 85 percent to 15 percent within four months. This alone increased my score by 40 points, to 720. The discrepancy was outrageous when I applied for loans.
At 680, lenders offered me 4.75 percent on a conventional 30-year mortgage with a 10 percent down payment. At 720, the same lenders were offering 4.125% with only 5 percent down. The difference of 0.625% saved me $147 per month on a $350,000 purchase. Throughout the loan, we will be saving $53,000 in interest.
The most outrageous aspect, in my mind, was the loan program access. The 680 score would restrict me to having higher down payment options, whereas 720 would provide access to first-time buyer programs and better PMI rates.
This experience influenced the way I counsel clients nowadays. Using less than 30 percent of your credit limit is simple advice everyone has heard, but the ideal number is under 10 percent across all cards. Most borrowers are unaware that the individual use of cards is as important as the overall use in the scoring formulas.
Jeffrey Hensel, Broker Associate, North Coast Financial
Schedule Timely Payments for Score Boost
As a financial journalist who guides many readers in their financial life decisions, I also went through this process when considering my decision to buy a home.
I focused on improving my credit score by ensuring all my card balances remained low and that my payments were made on time without fail. As a freelance writer with various income streams, I scheduled payments to arrive a few days before the due date, creating an ideal payment pattern over a six-month period.
My score increased by 60 points to 780, which significantly changed the type of mortgage offers I could access. Starting from the standard offers in the area of around 3.8% interest rates, it became competitive with multiple offers at 3.2%. Mortgage lenders began to offer additional benefits such as courtesy waiving of arrangement fees and substantial cashback deals.
The improved credit rating unlocked high-ratio loans. Instead of the usual 85% mortgages, lenders offered 90% and in some cases even 95% products. Thanks to these, I could save more money to use towards home improvements and furnishing my new home.
Banks significantly streamlined their processes. One lender expedited my approval, with everything now completed within two weeks. The higher score allowed me to have genuine options to choose from among several competing proposals, putting me in an advantageous position during negotiations. I could select the best all-round package instead of settling for whatever was on offer, which actually results in savings of thousands over the mortgage period.
Katherine Read, Financial Writer, SovereignBoss
Clear Small Debts for Big Impact
I believe the best thing to do before applying for a mortgage is to work hard on reducing credit card balances. It’s important to push balances below ten percent of the credit limits and maintain them there, even splitting payments between paydays to maintain low utilization when statements are reported. That was enough to turn a credit score in the 700s into one in the 760s, where wholesale lenders typically set their best pricing ranges. I explain to clients time and again that “good enough” credit is not rewarded by lenders. They appreciate attention to minor details such as balance management and cleaning up any mistakes in credit reports.
By the time I saw an improvement in the rate sheet, mortgage insurance costs were reduced, and I could access specialty loan programs offered to investors and self-employed buyers with much better rates. It saved thousands of dollars per $1,000 of the initial $400,000 loan in lower monthly payments. Better still, it placed me in the position where lenders were vying for my business rather than vice versa.
Ryan McCallister, President & Founder, F5 Mortgage
Manage Buy Now Pay Later Accounts
One strategy that worked for me was paying off a small $1,600 personal loan that had less than 18 months remaining. Many people focus on credit cards, but I learned that installment loans, especially small ones nearing completion, can disproportionately drag your score due to their balance-to-original-loan ratio. Once I cleared that loan, my score increased by 23 points in less than a month.
What most people don’t realize is that FICO algorithms favor loans that are either completely paid off or well below 35% of the original balance. In my case, the loan was at 70% of its original value even after I was making regular payments. That was hurting my credit mix and my “amounts owed” category.
This strategy worked wonders for me. My loan officer re-ran my file, and suddenly I qualified for a 5% down conventional loan instead of being pushed toward an FHA loan. That meant no upfront mortgage insurance premium, and I could waive escrows. It gave me negotiation flexibility, and that was the difference in winning my first bid.
If you’re preparing your credit, don’t focus solely on the significant balances. Clean up the small debts with short terms that are close to completion. You’ll be surprised how quickly FICO rewards that approach.
Chris Desino, Owner, Ocala
Lower Credit Card Utilization Below 30%
Before applying for my mortgage, I made sure my credit score was solid — not just by paying bills on time, but by digging into the smaller “Buy Now, Pay Later” apps tied to my name.
What people don’t realize is that it’s not just big loans that affect your score — small BNPL purchases can, too.
These services are convenient, and because they show up as checkout options, you might use them without even thinking. I’ve done it myself — it’s just easier sometimes. But with newer credit models starting to factor in BNPL activity, even those little purchases can matter. So I cleaned up unused accounts and made sure everything else was current.
That small step paid off — I ended up with a stronger score, and that helped me qualify for a better mortgage rate.
One tip I’d share: check your credit report regularly. It’s the easiest way to catch small things — like forgotten accounts or BNPL purchases — that could sneak up and hurt your chances when it matters most.
Julia Egorova, Owner, Flowers & Flowers
Time Payments to Minimize Reported Balances
The most impactful step I took was aggressively paying down my credit card balances to get below 30% utilization across all cards. I had been carrying balances around 60-70% of my credit limits, which was absolutely crushing my score even though I never missed payments.
I focused on this because credit utilization accounts for about 30% of your credit score, making it one of the fastest ways to see improvement. Within three months of getting my balances under 30%, and ideally under 10% on my primary cards, my score jumped from around 680 to over 720.
That 40-point increase completely transformed my mortgage options. Instead of being limited to FHA loans with higher interest rates and mortgage insurance requirements, I suddenly qualified for conventional loans with significantly better terms. We’re talking about the difference between a 6.8% interest rate and a 5.9% rate, which saved me over $200 per month and tens of thousands over the life of the loan.
What really surprised me was how this also affected my down payment options. With the improved score, I qualified for programs that required as little as 5% down instead of the 10-20% I was originally looking at. This freed up cash flow for moving expenses and home improvements.
Beyond the financial benefits, there’s something powerful about walking into a lender’s office knowing your credit is solid. You negotiate from a position of strength rather than hoping someone will work with you. That confidence alone made the entire home buying process less stressful and more empowering.
The key is being strategic about which balances to pay down first. Focus on cards closest to their limits since utilization is calculated per card, not just overall.
Dominykas Kalvelis, Owner, We Buy NJ Homes Fast
Implement the Do Not Disturb Rule
Two months before submitting my mortgage application, I addressed my credit utilization issue. One card was using approximately 62% of its limit; I paid it down to under 10% of its limit, moved payments to post-purchase (pre-statement) dates, and sought small credit line increases on two cards to reduce utilization without incurring new debt. I also closed two $0 balance inactive accounts that would occasionally cause problems with random $12-$20 charges.
Within sixty days, my mortgage FICO score increased by approximately 45 points (from 721 to 766 on the lender pull). That single change put me into a better pricing tier and eliminated the discount points that the lender originally attempted to charge. Although I maintained my usual spending habits, the timing of the pre-statement payments was the main factor that affected the low balance reported to the credit bureaus.
The situation improved rapidly: I became eligible for a rate 0.375% lower and a small lender credit, and I was able to eliminate PMI earlier due to a stronger credit score. On a mid-six-figure loan, this translated to about $170/month in savings and avoided interest costs over 30 years. Focus on managing your credit utilization at your statement close — it’s the fastest, most controllable factor in the lead-up to when you apply for a mortgage.
Rob Dillan, Founder, EVhype.com
Contest Inaccurate Credit Report Entries
The best way to boost your credit score before applying for a mortgage is something that I call the “Do Not Disturb” rule. Here, I decided to stop applying for new credit cards and loans at least six months prior to getting involved in the mortgage process. This is because every time you make an application, it counts as a hard inquiry on your report and may reduce your score by 3 to 5 points in total. That may not seem like much, but these points can push you out of one interest rate category and into another when you are trying to finance a big mortgage. Lenders look at multiple inquiries in a short time frame and take it as a sign you are using or relying on extra credit, and I wanted to make sure to avoid that perception entirely.
When I applied, my score was strong enough for an interest rate nearly half a percent lower than what I would have otherwise qualified for. On a $300,000 mortgage, the difference was nearly $40,000 saved throughout the duration of the loan. This one move put me back in control and on better financial terms.
Faraz Hemani, Chief Executive Officer, Iron Storage
Maintain Low Credit Utilization Consistently
I asked for my credit report to be manually reviewed before submitting my mortgage application to contest a medical collection of $287 that had already been fully paid. Borrowers often do not pay much attention to amounts less than $500 since they believe it will not count, but automated systems used by lenders still consider them new delinquencies. Within 30 days, that one entry increased my score by 42 points, moving me from a middle score of 689 to 731. The difference resulted in a shift to a better category of risk with no increase in income or savings.
The variance in monthly cost was significant. The interest rate quoted on a $500,000 mortgage was reduced to 5.75 percent, rather than the previous 6.1 percent, and lowered the monthly payment by approximately $140. Over a 30-year timeframe, that amounts to almost $50,000 saved, all from fixing a single ignored report item. It demonstrated the extent to which financial planning could be improved in the long run by taking comparatively minor corrective action.
Gregg Feinerman, Owner and Medical Director, Feinerman Vision
Stop Using Credit Cards Temporarily
Having a good credit score is a must, especially with interest rates so high right now. The better your credit score, the better the APR when applying for a mortgage loan. When first getting started, if you have low or no credit, you should get a secured credit card. After that, the next step is to pay off the loan that you’re closest to paying off. There may be a temporary dip in your credit score, but after a while, it’ll be more beneficial than detrimental. If you’re at a point where you can get an unsecured credit card, you should do that. What worked for me is keeping the credit utilization ratio under 5% and paying it all off every month. If you can show consistency in all of these, your credit score should show a noticeable improvement in the next 6 months.
Sergio Aguinaga, Real Estate Investor, Michigan Houses For Cash
Settle Debts and Increase Credit Limits
Paid off 90% of my credit card balance and stopped touching it for three months.
It sounds obvious, but most people don’t realize how fast your score can change when you just stop using credit altogether. It bumped my score enough to unlock better fixed-rate offers, and saved me a lot of money.
Mateusz Mucha, Founder, CEO, Omni Calculator
Build Credit with Small, Manageable Loans
I settled a credit card debt of $1,200 six months prior to my mortgage application and maintained a credit utilization of less than 25%. Another thing I did was to request my bank to upgrade my limit by adding an extra $2,500 to my initial limit of $5,000 to reduce my ratio, without causing an increase in the debt. This had a consistent impact since lenders measure utilization nearly as heavily as on-time payments. To maintain my score, I did not make new hard inquiries at that time.
This increased my score by approximately 40 points, which put me into an improved credit category. My fixed interest rate dropped from 6% to 5.5% on a mortgage of $200,000. That would result in savings of about $20,000 in interest over 30 years. It also made me more powerful in the negotiation since the lender perceived me as less risky. The approval process was less stressful and also less time-consuming due to my pre-planning.
Jin Grey, CEO and SEO Expert, Jin Grey
Keep Cards Open While Reducing Balances
One step I took to improve my credit score before applying for a mortgage was taking out small, short-term loans like a car/bike loan or a small personal loan and keeping the EMIs under 5% of my monthly income. It helped build a steady repayment history without straining my finances. At the same time, I made it a goal to save for a down payment of at least 20% of the house price. That combination not only boosted my credit score but also improved my chances of approval and gave me access to better interest rates.
Justin Smith, CEO, Contractor+
Negotiate Better Terms with Higher Scores
Reducing the use of credit cards is one of the most effective methods of reinforcing a credit score. It seems to most people that closing unused credit cards can be beneficial; however, it usually lowers the amount of available credit and deteriorates the utilization ratios. Keeping an account open and gradually reducing the balances to less than 10 percent is far more influential. In this instance, balances previously held at or close to 40 percent were reduced to 8 percent in six months, and the score increased by 67 points.
That change pushed the rating into the mid-700s, and it immediately opened the door to more powerful financial products. With the higher score, lenders granted mortgage options that were not available before. The margin between the two was wide, resulting in a reduced interest rate over a 30-year loan.
Additionally, there was no longer a need to purchase private mortgage insurance, which further reduced monthly costs. What started as small and regular payments turned out to result in significant long-term financial savings.
J.R. Faris, President & CEO, Accountalent
Pay Full Credit Card Balance Monthly
Credit scores significantly impact your mortgage. Any score above 670 will be considered good enough to be eligible for most loans. You are no longer limited to only FHA or VA loans.
However, if you manage to achieve a score above 720/740, you can negotiate better terms, potentially saving thousands of dollars on your mortgage.
Take a $300,000 fixed mortgage with a 6.5% interest rate, for example. Even if you qualify for a 0.5% lower interest rate (6%), you can save around $30,000 over the life of your loan. That’s a substantial amount of money and should be taken seriously.
Here’s what you can do to improve your credit score: Keep your credit utilization rate below 30%. For instance, if your credit limit is $5,000, try not to use more than $1,500.
Sal Dimiceli, Owner/Broker, Lake Geneva Area Realty
Reduce Credit Utilization
I achieved the most significant credit transformation by ensuring I paid my entire credit card balance without exception at the end of each month. My financial discipline through monthly credit card balance payments became the most important factor that reduced my credit utilization and proved to lenders that I am a trustworthy borrower. The regular maintenance of my credit score resembled gardening because steady attention allowed it to flourish. The effort I put into paying off my mortgage resulted in better interest rates, which turned my dream home into a cost-effective investment that will save me more than $100,000.
André Disselkamp, Co-Founder & CEO, Insurancy
