Applying for a mortgage can be exciting, but your credit score plays a big role in whether you get approved and the interest rate you receive. A higher credit score can make it easier to get a mortgage and save you money. Luckily there are practical steps you can take to improve your score before applying.
The first step is to check your credit report. You can get a free report from a credit reference agency. Look for mistakes, like wrong late payments or accounts that aren’t yours. If you find any errors contact the agency to correct them. Fixing mistakes can quickly improve your credit score.
Next try to reduce your credit card balances. High balances can lower your score, aim to use less than 30% of your available credit. Paying down what you owe shows lenders that you manage your money responsibly.
Always make your payments on time, Late payments can stay on your credit report for years. Setting up automatic payments or reminders can help you avoid missing any bills. Consistently paying on time is one of the most important ways to improve your credit score.
Avoid opening new credit accounts right before applying for a mortgage. Each application can temporarily lower your score, multiple recent applications can make lenders see you as a higher risk. Focus on keeping your current accounts in good shape.
If possible you can also become an authorized user on someone else’s account with a good history. This can sometimes help your score but make sure the account holder is responsible with payments, or it could hurt your score.
Consider combining debts or transferring balances to reduce interest rates and make payments easier. This can help lower your overall credit usage and improve your score, as long as you don’t open too many new accounts at once.
Finally give yourself time, credit scores don’t improve overnight. By checking your report, paying down debt, and making all payments on time, you can boost your credit score and increase your chances of getting a mortgage with better terms.
