Your credit score helps lenders assess the risk you pose when applying for a mortgage — here's how to make sure it's ready.
Buying a home is one of the biggest financial decisions most people make, and your credit score plays a bigger role in that process than almost any other factor. It affects not just whether you're approved, but how much the loan actually costs you over its lifetime.
Mortgage lenders use your credit score to set your interest rate. Even a difference of 40-50 points can shift your rate enough to change your monthly payment by a meaningful amount — and over a 30-year loan, that adds up to tens of thousands of dollars in extra interest paid.
Before you apply for pre-approval, it's worth pulling your reports from all three bureaus and checking them closely. Duplicate accounts, incorrect late payments, and outdated collections show up more often than people expect — and each one can be dragging your score down unnecessarily.
Credit repair takes time to show results, so the earlier you start before house-hunting, the better. Ideally, begin reviewing and addressing your credit profile at least 3-6 months before you plan to apply for pre-approval. This gives disputes time to process and gives you room to build positive history if needed.
One mistake we see often: people open a new credit card or finance furniture right before or during the mortgage process. New inquiries and new debt can lower your score and your debt-to-income ratio at exactly the wrong time. Hold off on new credit applications until after closing.
If you know a home purchase is on the horizon, getting your credit profile reviewed now — rather than waiting until you're ready to apply — gives you the most room to improve your position and your rate.