Your credit score plays a crucial role in getting approved for a mortgage and securing better interest rates. Here are proven strategies to improve your credit score.

Credit score meter showing improvement

Understanding Credit Score Factors

Your FICO score is influenced by five main factors:

  • Payment History (35%)
  • Credit Utilization (30%)
  • Length of Credit History (15%)
  • Credit Mix (10%)
  • New Credit (10%)

1. Make Payments on Time

Payment history is the biggest factor in your credit score:

  • Set up automatic payments
  • Pay at least the minimum amount due
  • Keep track of all due dates
  • Address any late payments immediately

2. Lower Your Credit Utilization

Keep your credit card balances low relative to your limits:

  • Aim for less than 30% utilization
  • Consider making multiple payments per month
  • Request credit limit increases
  • Keep old accounts open to maintain available credit

3. Manage Your Credit Mix

A diverse credit portfolio can help your score:

  • Mix of revolving credit (credit cards)
  • Installment loans (auto loans, student loans)
  • Mortgage loans
  • Personal loans

4. Be Strategic with New Credit

New credit applications can temporarily lower your score:

  • Only apply for credit when necessary
  • Avoid multiple applications in a short period
  • Research qualification requirements before applying
  • Consider the impact on your credit age

5. Monitor Your Credit Report

Stay informed about your credit status:

  • Check your credit report regularly
  • Dispute any errors promptly
  • Watch for signs of identity theft
  • Track your progress over time

Quick Tips for Credit Improvement

Do:

  • Pay bills on time
  • Keep credit utilization low
  • Maintain old accounts
  • Monitor your credit report
  • Dispute errors promptly

Don't:

  • Close old credit cards
  • Apply for multiple new accounts
  • Max out credit cards
  • Miss payments
  • Ignore credit report errors

Planning for a Mortgage

If you're planning to apply for a mortgage:

  1. Start improving your credit at least 6 months in advance
  2. Avoid opening new credit accounts
  3. Keep credit card balances low
  4. Document all income and assets
  5. Save for a larger down payment

Use our mortgage calculator to see how different credit scores affect your potential mortgage payments. Better credit scores typically lead to lower interest rates, which can save you thousands over the life of your loan.

Next Steps

  1. Get your free credit report
  2. Set up automatic payments
  3. Create a debt repayment plan
  4. Monitor your progress
  5. Compare mortgage rates with our rate comparison tool

Remember: Improving your credit score takes time and consistency. Focus on developing good financial habits, and your score will gradually improve.

Ready to explore mortgage options? Check current rates with our rate tracker tool.