How to Improve Credit to Buy a House
A short guide to the credit habits that can help raise your score and improve mortgage approval odds and rates.
Improving Your Credit Score
Improving your credit score is one of the most important steps to buying a house. Most lenders require a credit score of at least 580 for FHA loans and around 620 for conventional loans.
Higher credit scores also result in lower interest rates.
Steps to Improve Credit
- Pay all bills on time
- Keep credit card balances below 30% of the limit
- Pay down debt
- Do not open too many new accounts
- Check your credit reports for errors
- Use a secured credit card or small credit union loan to build payment history
Why It Matters
Improving your credit score can take time, but even a small increase in credit score can significantly reduce your mortgage interest rate and monthly payment when buying a home.
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