A mortgage is typically the largest loan you’ll take, often for 15 to 30 years. Lenders view a high credit score as evidence that you can repay them over time. With a good score, you can lower your interest rate, cutting your monthly payments by hundreds. Even a small increase in score can make a noticeable difference on a large mortgage. In simple terms, the higher your score, the cheaper and easier your home loan credit score will be.
Conventional mortgages typically require a credit score of 620 or higher. (Note: 620 is still only “Fair” credit by FICO standards.) VA loans typically require a credit score of approximately 620, although the VA itself sets no strict minimum. FHA loans are more lenient: a 580 FICO score normally qualifies you for a 3.5% down payment FHA loan, while scores 500–579 generally need 10% down. The mortgage credit requirement for USDA (rural home) loans are typically a credit score of 640 or higher. To secure the best rates, aim even higher (700+ if possible), as each point can impact your rate.
If you apply with a co-borrower (such as a spouse), remember that lenders will review both credit files. They typically use the middle of your three bureau scores, and in a joint application, they use the lower of the two applicants’ middle scores. In other words, if one of you has weaker credit, you both need to improve it. Coordinate your efforts so that both credit histories get stronger.
A FICO credit score (300–850) is built from these factors:
In the first week, go line by line through all three credit reports. If anything is wrong – a late payment you paid on time, an account that isn’t yours, a balance typo – file a dispute at each bureau. You can usually do this online. Include proof (bank statements or letters) so the bureau can verify the mistake. Errors can drag your score down unfairly, and correcting them is often the quickest way to gain points.
Next, list any accounts that are past due. If you have a credit card, loan, or utility bill that is even a day past its due date, pay it up. Call the creditor to confirm the amount needed to bring the account up to date, then pay that amount. Once the account is current, maintain that status. Even one missed payment can hurt you for months.
If a small collection or charge-off is affordable, pay it off. A paid collection looks better than an unpaid one, though it stays on your report. If it’s medical debt, try negotiating. Many hospitals or doctors will accept less if payment is made immediately. Collections agencies often agree to a “pay-for-delete,” removing the collection after you pay in full. Include any confirmations of payment or agreements in writing for your records.
Now, tackle credit card debt. List each card’s credit and limit, and focus on the highest-balance cards first. Try to reduce the utilization of every card to below 30%. Pay down the largest balances you can this month. For example, if a card has a $5,000 limit and a $4,000 balance (80% utilization), paying $1,500 off will bring the balance down to 30%. The effect on your score from that alone can be substantial. If possible, pay enough before the billing cycle closes so that the lower balance is reported to the credit bureaus. If possible, request a small credit limit increase on a card you’ve used responsibly.
Set up auto-pay or reminders for every bill due this month. Our goal is zero missed payments. Even if you don’t pay much extra beyond the minimum, paying on time adds positive history. This first month is critical for establishing that. If you have any cash left, pay a bit more on top of the minimum on cards with balances – every extra dollar accelerates rapid credit improvement.
Do not apply for any new credit cards, loans, or mortgages this month. Each new credit application results in a hard inquiry that can shave points off your score. Additionally, do not close any existing accounts at this time. Keep every paid-off credit card open (even with $0 balance) to preserve your total credit limit and account ages.
Continue the habit of paying all bills on time. These on-time payments will soon be reflected in your credit history and have a positive impact on your credit score. At this point, every account in good standing is a win.
Continue to pay extra money toward your remaining debts. Use any bonus, tax refund, or extra paycheck to pay down balances. Focus on the highest-interest debt (debt avalanche), but also consider quick wins (debt snowball by paying off the smallest balance entirely). Lowering your total debt load lowers utilization and improves DTI.
If your credit profile is still sparse, consider adding a small account this month. For example, a credit-builder loan (typically $500–$1,000) from a credit union or a secured credit card can help diversify your credit mix. Only do this if it makes financial sense and if you’ll use it responsibly. If you open a new account, charge a small amount, and pay it off in full each month, this adds to your payment history without incurring debt.
Another strategy is to ask a family member with good credit to add you as an authorized user on one of their credit cards. If that card has a long, clean history (paid on time and high limit), you’ll inherit that positive history. This can instantly improve your length of history and payment track record. Ensure the primary user never misses a payment and that the card issuer reports authorized-user data to all credit bureaus.
After Month 1, your utilization should be improved, but you can still further enhance it. If you receive any credit limit increases, keep those balances low to maximize the benefits. Some issuers will raise your limit or extend your due date if asked politely, giving you breathing room. Additionally, consider adjusting your card’s statement closing date to align it with your payday, which can make timely payments easier. Every bit helps.
Keep tracking your credit scores weekly. Use free apps or your bank’s score tool. If you see jumps up, celebrate the progress. If your score stalls or dips, investigate the cause.
Keep paying everything on time. By now, your recent payments should be building a trend of responsible credit use. Don’t let up now.
About two weeks before the end, pull your credit reports one more time. Confirm that all the items you fixed are updated. Dispute anything that is still incorrect. If a payment you made isn’t showing as paid, follow up with the creditor immediately. The goal is zero surprises. Prepare documentation for your mortgage application. For example, if you have paid off a loan, keep the payoff receipt. If you successfully disputed an error, keep the confirmation. You may be asked to provide proof.
If you froze your credit for safety, now is the time to unfreeze (thaw) all three files. Do this at least a week before applying. Each bureau takes a couple of days to thaw. Without thawing, the lender cannot pull your report, and your loan can’t proceed.
At this point, don’t open or apply for anything new. Even small credit applications or financing (such as buying furniture on a credit card) can increase your utilization or trigger inquiries. Keep any cards you have with a low or zero balance. If you must spend, put it on a card and pay it off immediately – do not let it sit on the statement.
Mortgage lenders might offer a rapid re-scoring service. If you’ve paid off a lot of debt recently, ask about it. The lender can submit the updated balances to the credit bureaus and get your score recalculated in a few days. This can confirm your lower balances quickly so that the underwriters see your best possible credit.
Continue to check your scores in the final days leading up to the deadline. If you see a sudden dip, investigate. Did a bill get reported late? Is there a new inquiry? Fix anything that can be fixed. By day 90, your credit profile should be as clean as possible.
Improving your credit in 90 days is intensive, but each action compounds the effect. By removing errors and paying on time, you eliminate negatives and add positives. By slashing debt, you improve the biggest numeric factor and lower your DTI. By avoiding new credit, you prevent new negative marks from appearing on your credit report. When you finally apply, your credit file will be in the best shape possible. With persistence, you’ll enter the mortgage process with confidence and qualify for the best rates your credit can get.