Search

↑
line drawing representing credit report and credit score

Prepare to apply for a mortgage with these credit tips

By Liz Keuler

April 2025

Your credit history is one of the main factors a lender evaluates when considering whether to approve your application for a mortgage loan, and on what terms. Put your credit report and credit score in the best possible position before you approach a lender – ideally, at least 30 to 90 days before your lender pulls a credit report – with these key credit preparations.

Review your personal credit report and dispute any mistakes

Go to AnnualCreditReport.com to review your credit reports from the 3 major credit bureaus, or you can go directly to each bureau (Experian, TransUnion and Equifax) to look for credit reporting errors. Anytime you access your own credit report it will appear as a “soft hit inquiry,” which means it has no impact on your credit score.

You used to be able to get free copies of your credit reports at AnnualCreditReport.com just once a year (hence the name) – but the site now allows you to check your credit reports as often as once a week.

If you do see errors on your credit report, it’s important to have them corrected so they don’t adversely impact your credit score. Check out this advice from the Federal Trade Commission about how to write dispute letters and where to send them. 

Pay down high credit card balances

If you carry credit card balances, paying them down can give your credit score a boost. That’s because your credit utilization ratio, or the percentage of your total available credit you’re using, is part of the calculation used to determine your credit score.

The good news: you don’t have to pay balances down to zero or close any accounts. According to Mike Olden of American Reporting Company, if you can afford it, paying a credit balance down to 20-25% of the credit limit can make a positive difference in your score.

For example, if your credit card has a $5,000 credit limit and you’re carrying a balance of $1,700, paying that balance down to $1,000 (20% of your $5,000 limit) could help improve your credit score.

If you don’t have cash on hand to pay down credit card balances all at once, make a plan to chip away at those balances over time. A loan officer can help you understand how your credit balances impact your mortgage options and whether you may want to take some time to improve your credit history before applying for a mortgage.

Opt out to avoid unwanted solicitations

We’re all accustomed to receiving promotional offers through just about every form of communication out there – calls, emails, snail mail and texts. Some of those offers are prescreened offers (or “firm” offers), meaning the company making the offer has used your credit report to determine in advance if you meet their specific criteria.

If you’d like to reduce the number of offers you receive, you can opt out! To protect yourself from unwanted solicitations, opt out of prescreened offers at OptOutPrescreen.com (for mail) and DoNotCall.gov (for phone calls).

Keep in mind that these opt-out programs don’t encompass all types of solicitations – for example, there are exemptions for nonprofits or lenders you may already be working with.

Lift credit freezes or locks

A credit or security freeze prevents others from checking your credit report. It can also protect you from identity theft by preventing new accounts from being opened in your name.

But if your lender tries to pull your credit report while you have a freeze in place, they won’t be able to see all your information, and this will slow down the lending process. Make sure to temporarily lift any freezes or locks you have in place before a lender pulls your credit report.

A little credit clean-up can help smooth the way when it comes time to apply for a mortgage. But if reviewing your credit shows you may not yet be ready to secure a loan, you may want to reach out to a housing counselor for more in-depth help. Regardless of your situation, reviewing your credit will help you know where you stand.

Related to This

Liz

Read more articles by Liz
Liz Keuler is the editor of Readynest. She spent a decade meandering through radio, nonprofits and the corporate world before convincing MGIC to hire her based on her staunch grammatical convictions. She lives in a charming 100-year-old bungalow on Milwaukee’s East Side. Her interests include old Ernst Lubitsch films, new action movies, 60s girl pop, Regency romance novels, word games, sewing and shallots.
We use cookies on this site to enhance your experience. By continuing to use this site you agree with our use of cookies.    Privacy Policy    accept