How Can You Improve Your Credit to Get a Mortgage?

By Michael Durr

Mike Durr, a devoted family man, seasoned athlete, and passionate sports fan, brings over 30 years of real estate expertise to his role at KMG Lending, where his analytical approach and industry-leading closing times have helped his team close over $60 million in property sales.

Buying a home is an exciting goal, but your credit score plays a major role in how smoothly the process goes. A good credit score not only helps you qualify for a mortgage but also ensures you get the best possible rate. Here’s how you can improve your credit score to make your home-buying journey easier and more affordable.

Why do credit scores matter? Your credit score is one of the first things lenders look at when determining whether to approve your mortgage application. A higher credit score signals that you are a lower-risk borrower, which means you are more likely to secure a lower interest rate. Even if you’re already eligible for a mortgage, a higher credit score can lower your monthly payments, saving you thousands of dollars over the life of the loan.

Credit score ranges and mortgage options. Understanding the different credit score ranges can help you know where you stand and what mortgage options are available to you:

• Below 550: It’s very difficult to qualify for a mortgage with a score below 550.
• 580: At this score, you can qualify for an FHA loan, but your interest rate will likely be higher.
• 620: This is the minimum credit score required for a conventional loan.
• 700: At this level, you’ll likely receive a competitive interest rate on a conventional loan.
• 740+: This score range is ideal for getting the best rates on a conventional loan.

The higher your score, the more favorable your mortgage terms will be. Ideally, you want to aim for a score in the 700+ range to take advantage of lower rates and better loan conditions.

Simple steps to improve your credit score. Improving your credit score may seem overwhelming, but it’s actually simpler than you think. Here are a few key steps to help you get started:

• Pay bills on time: Timely payments are the most important factor in your credit score. Setting up automatic payments or reminders can help you avoid late payments.
• Use credit cards responsibly: If you don’t already have credit cards, consider applying for one. But be cautious with how much you charge. Keep your credit utilization below 30% of your available credit, ideally between 10-20%. Always aim to pay off the balance in full every month to avoid interest charges.
• Become an authorized user: If you have a family member with a good credit history, ask if you can be added as an authorized user on their credit card. This can help you build credit quickly without needing to use the card yourself. Just make sure the primary cardholder has a good track record with payments.

It’s important to remember that credit is dynamic and can be improved over time. If you’ve made mistakes in the past, don’t worry—negative marks won’t last forever. By following the steps above and practicing responsible credit habits, your score can rise steadily.

A higher credit score means you’ll be in a better position to secure a mortgage with lower rates and less money down. If you’re serious about buying a home, improving your credit is one of the best investments you can make. With the right strategies, you can turn your credit around and open doors to better mortgage options. If you have questions or need more guidance, feel free to call or text me at 281-348-9899 or email me at mike@mortgageguys.pro.