How to Raise Your Credit Score to Buy a Home

Whether you're preparing to buy your first home or planning your next move, your credit score plays a major role in the homebuying process. It affects your ability to qualify for a mortgage, what interest rate you’ll be offered, and even how much house you can afford.

If your credit isn’t quite where it needs to be—or you’re just not sure where to start—don’t worry. Many buyers find themselves in the same position, and with a little guidance, improving your credit score is totally doable.

Here’s what you need to know about how credit scores work and what steps you can take to boost your credit before buying a home.

What Makes Up Your Credit Score?

Most lenders use FICO® Scores, which range from 300 to 850. The higher the number, the better. Here’s what contributes to that score:

• Payment History (35%)
  The most important factor. This tracks whether you’ve paid your past credit accounts on time. Missed or late payments can hurt your score significantly.
• Credit Utilization (30%)
  This is the percentage of your available credit that you’re currently using. Using too much of your available credit—even if you pay on time—can lower your score.
• Length of Credit History (15%)
  The longer your credit history, the better. This includes the age of your oldest and newest accounts and the average age of all accounts.
• Credit Mix (10%)
  Lenders like to see that you can manage different types of credit—such as credit cards, auto loans, and installment loans—responsibly.
• New Credit (10%)
  Opening several new credit accounts in a short time can signal risk, especially if you don’t have a long credit history yet.

5 Steps to Improve Your Credit Before Buying a Home

1. Make Every Payment On Time

Late or missed payments can stay on your credit report for up to seven years. To avoid this:

• Set up automatic payments or calendar reminders.
• Make at least the minimum payment each month—even if it’s not the full balance.
• If you're behind, contact your creditors to see if they can work with you to bring your account current.

Consistently paying your bills on time is the most effective long-term way to improve your credit.

2. Reduce Your Credit Utilization Ratio

Your goal should be to keep your credit usage below 30% of your total credit limit, and ideally under 10% for an even better boost. Here's how:

• Pay down high balances, starting with cards that are close to their limits.
• Ask for a credit limit increase, but don’t increase your spending. A higher limit can improve your utilization ratio without additional payments.
• Spread balances across multiple cards to avoid one account being maxed out.

This one step alone can have a fast impact on your score if done wisely.

3. Avoid Opening New Credit Before Applying for a Mortgage

Each new credit application can result in a hard inquiry, which may slightly lower your score. Too many in a short time frame can be a red flag to lenders.

• Avoid store credit cards or promotional financing offers in the months leading up to your home purchase.
• Don’t finance large purchases like a car or furniture just before applying for a mortgage.

If you're trying to improve your score, it's best to pause any unnecessary credit activity.

4. Keep Older Accounts Open

Your credit history’s length matters, and closing old accounts can shorten it.

• Unless there’s an annual fee or another reason, consider keeping older accounts open, even if you don’t use them often.
• Use them for small purchases occasionally to keep them active, then pay them off immediately.

This helps establish a longer credit profile, which improves your score over time.

5. Check Your Credit Reports and Dispute Errors

Mistakes on your credit report—like payments incorrectly marked late or accounts you never opened—can drag down your score unfairly.

• Get free copies of your credit reports from AnnualCreditReport.com.
• Look for errors in account status, balances, and payment history.
• If you spot anything suspicious, file a dispute with the credit bureau and the creditor involved.

Correcting even one error can have a noticeable impact on your score.

Be Patient and Stay Consistent

Credit scores don’t jump overnight, but small, consistent actions add up. Most mortgage lenders require a minimum credit score of 620 for a conventional loan, but the best rates are usually available to borrowers with scores of 740 or higher. So improving your credit, which is always a good idea, can help you:

• Qualify for better loan programs
• Get lower interest rates
• Reduce your monthly mortgage payment

Whether you're just beginning your home search or preparing to buy in the next year, now is the time to take control of your credit.

Improving your credit score is one of the best ways to prepare financially for homeownership. It doesn’t matter if you're buying your first home, your next one, or your forever home—better credit gives you more options, more flexibility, and more confidence when it’s time to make the offer.

When you’re ready to take the next step, connect with a trusted Realtor® who understands your goals and can help guide you through every part of the process—from pre-approval to closing day.