When it comes to buying a home, your credit score can make or break your mortgage application. It influences whether you’re approved, what interest rate you’ll pay, and ultimately how much house you can afford.
In 2025, with mortgage rates averaging 6–7%, having a strong credit score is more important than ever. Even a small difference in your score could mean saving (or spending) tens of thousands of dollars over the life of your loan.
The good news? Boosting your credit score is possible – and it doesn’t have to take years. This guide will show you practical steps you can take before applying for a mortgage to put yourself in the best financial position.
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Why your credit score matters when buying a home
Mortgage lenders use your credit score to evaluate risk. The higher your score, the more likely they are to offer you lower interest rates and better loan terms.
- Excellent (740–850) → Best rates available.
- Good (700–739) → Still strong, may qualify for competitive rates.
- Fair (620–699) → Eligible for many loans, but rates may be higher.
- Poor (<620) → Limited options, FHA or specialized programs may still be available.
Example: On a $400,000 loan over 30 years:
- A buyer with a 760 score at 6.2% might pay ~$2,457/month.
- A buyer with a 650 score at 7.2% might pay ~$2,703/month.
That’s a $246 difference every month – or nearly $88,500 over the life of the loan.
Step 1: Check your credit report early
- Request free reports at AnnualCreditReport.com (all three bureaus: Experian, Equifax, TransUnion).
- Look for errors such as incorrect balances, late payments, or accounts that aren’t yours.
- Dispute inaccuracies – they can drag down your score unfairly.
Do this 6–12 months before applying if possible, so you have time to correct issues.
Step 2: Pay down revolving debt
Credit utilization – how much of your available credit you’re using – makes up 30% of your score.
- Keep balances below 30% of your credit limit (ideally under 10%).
- Pay down high-interest credit cards first.
- Consider making multiple payments throughout the month to keep utilization low.
Step 3: Avoid late payments
Your payment history is the single biggest factor in your score (35%).
- Set up autopay for all bills.
- Even one missed payment can hurt your score for up to 7 years.
- If you’ve had late payments in the past, focus on building a streak of on-time payments.
Step 4: Don’t open or close accounts before applying
- New credit inquiries temporarily lower your score.
- Closing accounts can hurt by reducing your available credit (raising utilization).
- Stick with your current accounts until after you close on your home.
Step 5: Build positive credit history
- If your history is thin, consider a secured credit card or becoming an authorized user on someone else’s account.
- Use small amounts and pay in full every month.
- A longer history = stronger score.
Step 6: Diversify your credit mix (if possible)
Having both installment loans (auto, student, personal) and revolving accounts (credit cards) can improve your score. But don’t take on unnecessary debt just for mix – it’s a smaller factor.
Step 7: Consider rapid rescore options
If you’re house-hunting soon and need a quick boost:
- Some lenders offer a rapid rescore service, updating your credit after paying off debts.
- This can raise your score in days instead of months.
FAQs
What’s the minimum credit score to buy a house in 2025?
Most conventional loans require at least 620. FHA loans may go as low as 580.
How long does it take to improve a credit score?
Small changes can show in 30–60 days. Major improvements may take 6–12 months.
Will checking my own credit hurt my score?
No. Soft inquiries (like checking your own report) don’t affect your score.
Can I still get a mortgage with bad credit?
Yes, but your options may be limited and interest rates higher. Assistance programs can help bridge the gap.
Conclusion: A stronger score means a stronger future
Improving your credit score before applying for a mortgage is one of the smartest financial moves you can make. It can lower your monthly payments, save you money over the life of your loan, and give you more flexibility when choosing a home.
At Arrive Realty & Finance, we don’t just help you find the right house – we help you prepare financially to afford it. Whether you’re six months away from buying or ready now, our team can guide you through the steps to strengthen your credit and secure the best loan possible.
???? Contact us today to start your homeownership journey – and let’s make sure your credit works for you, not against you.
