A higher credit score can unlock lower interest rates, saving you thousands over the life of your mortgage. Before applying, take steps to improve your score.
First, obtain copies of your credit reports from all three bureaus and dispute any errors you find.
Second, focus on paying all your bills on time, every time. Payment history is the single most significant factor affecting your score.
Third, work on reducing your credit utilization ratio – the amount of revolving credit you're using compared to your total available credit. Aim to keep this below 30%.
Pay down credit card balances, but avoid closing old accounts, as this can shorten your credit history.
Finally, refrain from opening new lines of credit in the months leading up to your mortgage application. Each new inquiry can temporarily lower your score. By being proactive, you can present the strongest possible financial profile to lenders.