June 1, 2025
5 Ways to Improve Your Credit Score Before Applying for a Mortgage
Start by Reviewing Your Credit Reports Carefully
Before you start shopping for a mortgage, take time to check your credit reports from all three major credit bureaus. Mistakes happen more often than you think; even a small error could impact your credit score and the interest rate you’re offered. Look for incorrect balances, outdated personal information, or accounts that don’t belong to you. If you find something that doesn’t look right, dispute it immediately with the credit bureau. You’re entitled to one free report from each bureau each year, so use this to your advantage. This step lays the foundation for the rest of your credit improvement journey.
Pay Down Credit Card Balances Strategically
Your credit utilization ratio—the amount of credit you use compared to your total credit limit—plays a significant role in your score. Keeping this number under 30% can help your score climb; under 10% is even better. If you carry high balances, pay them down aggressively before applying for a mortgage. Start with the card with the highest interest rate or utilization. Even if you can’t pay everything off, reducing balances shows lenders that you manage your credit well and aren’t overextended.
Make All Payments on Time, Every Time
One of the most important things you can do to improve your credit score is to make your payments on time. Even one missed payment can have a profound effect on your score and your mortgage prospects. Set reminders, automate your payments, or use budgeting tools to ensure you never miss a due date. Contact your lenders to discuss your options if you’re struggling with costs. Keeping your accounts in good standing sends a positive signal to mortgage lenders and can make a real difference in the interest rates you’re offered.
Limit New Credit Applications While Preparing for a Loan
When you apply for a new credit account, it triggers a hard inquiry on your report. A few of these aren’t a big deal, but if you rack up several quickly, it could temporarily lower your score. Before applying for a mortgage, it’s a good idea to pause on any new credit card or loan applications unless necessary. Focus on maintaining your existing accounts in good standing instead. This stability can make your credit profile more appealing and reduce any red flags in the eyes of mortgage underwriters.
Keep Older Accounts Open and Active
The length of your credit history is another key factor in your credit score. If you have old accounts in good standing, keep them open—even if you don’t use them often. These accounts add depth to your credit history and show lenders you have long-term experience managing credit. If you rarely use a particular card, consider making a small purchase every few months and paying it off immediately to keep the account active. Closing old accounts can reduce your total available credit and shorten your credit history, dragging down your score.
Let Us Help You Make the Most of Your Credit
Raising your credit score takes time, but the payoff can be significant, especially when qualifying for a better mortgage rate. At Community Mortgage, Inc., we help you understand how your financial profile impacts your loan options and work with you to create a personalized plan. Contact us today at (619) 692-3630 or fill out our online form for a free consultation. We’re here to help you secure the right loan at the right time.