How to Improve Your Credit Score to Buy a Home

Published on March 4, 2019 | Webster Bank
Last updated: May 22, 2025

A study by the National Foundation for Credit Counseling found that 36% of people think there’s no reason to check their credit score, but there’s a very important reason to know your score when you want to buy a home. A credit score isn’t the only deciding factor on your mortgage application, but it is a critical one. So, before you apply for a mortgage or even start your house shopping, be aware of where your credit stands and what you can do to improve it to get the best mortgage rate possible.

What Credit Score Do You Need to Buy a Home?

The FICO model is commonly used to determine credit score. It grades consumers on a 300 to 850 point range, with a higher score indicating a better credit risk. Typically, you’ll need a minimum credit score of 620 to qualify for a conventional mortgage. This is considered a “Fair” credit score, so don’t think your credit has to be perfect to purchase a home.

However, typically, the higher your score, the lower the interest rates and better terms you’ll qualify for. If your score is at the lower end, your lender may require other qualifications such as a higher income or larger down payment and you may end up with a higher interest rate.

Note that the score you pull from a website is not necessarily the score your lender will use. Mortgage lenders use an approved industry model specific to mortgage financing.

How to Improve Your Credit Score Before Applying for a Mortgage

When you apply for a mortgage, checking your credit score is one of the first things your lender will do, so it pays to do everything you can to improve your score in advance. While your long-term credit history ultimately determines your score, there are things you can do to ensure your score is looking its best when you need it to:

1. Pay down your credit card balances.

The ratio between the amount of credit you have and the amount you owe is a key factor in your creditworthiness. If you maintain enough available credit, you’re less likely to need more funds. Lenders will note that—and see you as less of a risk. It’s best to maintain or lower balances to below 30 percent of the credit limit on each account.

2. Don’t close out your oldest credit cards.

Maybe you’re now using a newer card offering valuable rewards, from hotel discounts to airline points. But those older cards in your wallet have a longer credit history – and since your credit history is the most important way for a lender to assess your risk, the length of that history counts. So, keep your older cards open.

3. Resist the temptation to open new cards.

Of course, an upcoming move is exciting, but don’t give in to the temptation to open new credit cards at furniture, appliance or home improvement stores right now. Even if you don’t use them yet, the potential debt you add may impact your score. Lenders may be concerned that you’re taking on too much, so only assume more credit when you need it.

4. Check for mistakes in your credit history.

This is important, because mistakes are more common than you might think. A range of studies have found that a quarter to a third of consumers have mistakes in their history, and many of these can make a difference in the mortgage they qualify for. Mistakes range from incorrect personal information to missing accounts and accounts attributed to the wrong consumer.

Federal law guarantees you the right to one free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) every 12 months. The official site to request these free reports is annualcreditreport.com. The three credit bureaus are now offering free weekly online credit reports through the site to help consumers keep track of their credit on a regular basis and identify errors. Go over each report and challenge any errors with the credit bureau providing it. Filing a dispute isn’t difficult and it doesn’t cost you anything. Each credit bureau has its own easy steps to follow. Find them here:

• Equifax
• Experian
• TransUnion

Preparation Pays

To buy a house, you want a credit score in the best possible shape. Paying close attention to your credit can improve your chance at qualifying for a more flexible loan with a better rate.

Webster Bank has local experienced Mortgage Banking Officers in your community who handle a full suite of mortgage products and are happy to work with you to find the best solution to your needs. Connect with us today.