What mortgage lenders look at
- Credit score
- FHA loans allow a 580 score with 3.5% down, or 500 to 579 with 10% down. Many lenders set their own higher minimum, often around 620.
- Payment history
- Late payments, especially recent ones, weigh heavily. Payment history is 35% of a FICO score.
- Debt-to-income (DTI)
- Lenders compare your monthly debt payments to your income to judge whether a mortgage payment fits.
- Credit card balances
- High balances compared with your limits can hold your score down, even if you pay on time.
Your plan, step by step
Timelines are a guide. Everyone's starting point is different.
Right now
Find out where you stand
- Pull your free reports from all three bureaus at AnnualCreditReport.com. They're free every week.
- Dispute anything that's wrong: accounts you don't recognize, wrong balances, late payments you didn't make.
- Work out your debt-to-income ratio so you know how much room a mortgage payment has.
Months 1 to 3
Clean up balances
- Pay credit card balances down, starting with the card closest to its limit.
- Set up autopay for at least the minimum on every account so nothing is ever late.
- Hold off on new cards, loans or financing. New accounts and hard inquiries can lower your score right before you need it.
Months 3 to 9
Build a steady track record
- Keep every payment on time. Months of clean history is what lenders want to see.
- If your file is thin, an account that reports on-time payments, like a credit-builder account or reported rent, can add history.
- Keep older accounts open so your average account age doesn't drop.
Months 9 to 12
Get ready to apply
- Pull your reports again and confirm earlier disputes were fixed.
- Get preapproved. Rate shopping for a mortgage within a short window generally counts as one inquiry.
- Keep your credit unchanged until closing: no new accounts and no big purchases on credit.
Tools that can help
Frequently asked questions
What credit score do I need to buy a house?
It depends on the loan. FHA loans allow a 580 score with 3.5% down, or 500 to 579 with 10% down, but many lenders set their own minimum, often around 620. Conventional loans usually expect higher scores. Ask lenders for their exact requirement.
How long before buying a home should I start working on my credit?
Six to 12 months gives you time to fix report errors, lower card balances and build a run of on-time payments. Starting earlier helps if you have recent late payments or collections.
Will shopping for a mortgage hurt my credit?
Several mortgage inquiries made within a short rate-shopping window are generally counted as a single inquiry, so comparing lenders is worth it. Applying for other kinds of credit at the same time is a separate matter.
Should I pay off a collection before applying for a mortgage?
It depends on the collection and the lender. First confirm the debt is accurate and yours. Then ask the lender how they treat paid and unpaid collections before you pay, so you know what will actually help your application.
Get a plan built for your situation
Answer a few questions about your budget and what's on your reports, and we'll match the steps above to specific options that fit.
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