If you’re planning to buy a home, your credit score is one of the most powerful numbers in your financial life.

It impacts:

• Whether you get approved
• Your interest rate
• Your monthly payment
• Your loan options
• Your required down payment

In 2026’s lending environment—where rates are still sensitive—improving your credit score even 20–40 points can save you thousands over the life of your loan.

Here’s how to position your credit the right way before applying for a mortgage.

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Why Your Credit Score Matters So Much

Mortgage lenders use your score to measure risk.

Higher score = Lower risk = Better terms.

Here’s a simplified look:

Credit Score	Loan Impact
760+	Best rates & terms
700–759	Strong approval odds
640–699	Average financing options
580–639	FHA eligibility range
Below 580	Limited loan access

Even a small bump can improve your buying power significantly.

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1. Pay Every Bill On Time — No Exceptions

Payment history makes up the largest portion of your credit score.

Late payments can drop your score fast—and stay on your report for years.

Pro tips:

• Set auto-pay on minimum payments
• Use calendar reminders
• Pay at least 5 days before due dates

Consistency matters more than anything else.

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2. Lower Your Credit Card Balances

This is one of the fastest ways to boost your score.

Lenders look at your credit utilization ratio—how much of your available credit you’re using.

Ideal utilization: Under 30%
Best scoring range: Under 10%

Example:

• $10,000 credit limit
• Keep balances under $3,000 (ideally $1,000)

Paying cards down—not off accounts—can create quick score gains.

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3. Don’t Open New Accounts Before Applying

Every time you open a new credit line, lenders see added risk.

Avoid:

• Store cards
• New credit cards
• Personal loans
• Financing furniture or appliances

Mortgage lenders prefer stability 6–12 months before approval.

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4. Avoid Large Purchases

Even if you qualify initially, new debt can derail final approval.

Hold off on:

• Cars
• Furniture
• Large electronics
• Personal loans

Your debt-to-income ratio matters just as much as your score.

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5. Keep Old Accounts Open

Length of credit history impacts scoring.

Closing old cards can:

• Shorten your credit age
• Increase utilization ratios
• Drop your score

If cards have no annual fee, keep them open—even with small activity.

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6. Check Your Credit Reports for Errors

Mistakes happen more often than people realize.

Look for:

• Incorrect late payments
• Accounts that aren’t yours
• Paid collections still reporting
• Balance inaccuracies

Disputing errors can lead to quick score improvements.

You’re entitled to free reports annually from all three bureaus.

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7. Become an Authorized User

If you have a trusted family member with strong credit, being added as an authorized user can help.

Benefits include:

• Longer credit history
• Positive payment reporting
• Lower utilization impact

This works best when the primary account is well-managed.

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8. Pay Collections Strategically

Not all collections impact mortgage approval equally.

Some lenders require:

• Paid collections
• Payment plans
• Deletion letters

Before paying anything, consult your lender—strategy matters here.

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9. Build Credit If You’re Starting From Scratch

If your file is thin, you may need to establish credit first.

Starter tools include:

• Secured credit cards
• Credit-builder loans
• Reporting rent payments
• Small installment accounts

The goal is to show consistent, on-time payment behavior.

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10. Time Your Mortgage Application Right

Credit prep isn’t overnight—it’s a 3–6 month strategy.

Best practice timeline:

6 months out:

• Pay balances down
• Dispute errors
• Avoid new accounts

3 months out:

• Keep utilization low
• Maintain on-time payments
• Avoid major purchases

30 days out:

• Don’t move money
• Don’t open or close accounts
• Don’t change employment if possible

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Score Improvement Impact Example

Here’s how credit affects buying power:

Score	Estimated Rate	Payment on $350K Loan
620	Higher rate	Higher payment
680	Mid-range	Moderate savings
740+	Best rates	Significant savings

A 60–100 point increase can save hundreds monthly—and tens of thousands long-term.

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Common Credit Mistakes Homebuyers Make

Avoid these pre-approval killers:

• Co-signing loans
• Missing small payments
• Maxing cards during home search
• Financing furniture before closing
• Job hopping mid-process

Mortgage approval is a financial snapshot—stability wins.

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Final Thoughts

Improving your credit score isn’t just about loan approval—it’s about affordability.

Better credit can mean:

• Lower monthly payments
• Lower cash to close
• More loan options
• Stronger negotiating power

In a market where rates still matter, credit preparation is one of the most powerful moves buyers can make before house hunting.