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7 Tips for Improving Your Credit Score for a Home Mortgage

At Mortgage Atlanta, we’re accustomed to putting in the work to find the best mortgage to fit our clients’ needs. But when it comes to credit scores, our hands are tied. That’s an area where you’ll need to put in the work to qualify for a mortgage and attain the best interest rates.  

Also known as a FICO® Score (created by the Fair Isaac Corporation), while the highest credit score you can achieve on the scale is 850, the average in the U.S. is 714 as of 2022. Scores that fall between 740-799 are considered Very Good, and scores between 800-850 are deemed Exceptional. Where your score falls on the scale could mean the difference between getting approved or denied for a mortgage and – if approved – could impact your interest rate to the tune of several percentage points, saving you thousands of dollars over the life of your loan.  

If you’re considering buying a home in the near future, here are a few tips from multinational data analytics and consumer credit reporting company Experian on ways to boost your credit score…

  1. Make Payments on Time: Missed or late payments can put a dent in your credit score, so – when able – consider setting up essential payments on autopay so the money is drawn from your account automatically before the due date. This is particularly important for credit cards, auto loans, and personal loans. Paying on time monthly across the board will improve your payment history – perhaps the most critical factor in determining your credit score.
  1. Pay Down High Credit Card Balances: When you know that a home purchase may be in your near future, you’ll want to pay down those credit card balances as soon as possible and think twice before using those credit scores. Credit utilization is another important factor to your credit score, so weigh those needs vs. wants and consider your expenditures before swiping. HOT TIP: Focus on those high-interest cards first.
  1. Once Within a Manageable Range, Pay Off Balances Each Month: Once you’ve paid off your credit card balances, don’t let them get out of control again. If you have a reward card that you use to build points toward travel or consumer goods, do your best to pay them off in full each month.  
  1. Ensure You Have No Outstanding Debt That’s Been Sent to Collections: If you have any unpaid bills that have been sent to a collection agency due to nonpayment, you’ll need to come to terms with it before it wrecks the good credit you’ve worked so hard to build. Either pay it in full or negotiate a settlement so it doesn’t impact your score further.  
  1. Establish or Repair Credit with a Credit-Builder Loan or Secured Credit Card: Occasionally, when college students graduate, they may have little to no credit. On the other hand, when a seasoned credit user falls on hard times and has to declare bankruptcy, they may need to repair their credit. A credit-builder loan or secured credit card will allow you to pay into an account before you can borrow against it. In a nutshell, it’s your money, but this is an opportunity to prove that you can manage it and raise your credit score.
  1. Study Your Credit Reports and Dispute Any Inaccuracies: Even if you have a good credit score, it’s wise to request a free credit report from the three main credit bureaus and review them carefully. If you find anything inaccurate, report the problem to the corresponding credit bureau so they can investigate and have it removed – which may boost your credit score.
  1. Don’t Close Old Accounts or Open New Ones: Many people have a common misconception that they need to close their credit card account once it’s paid off. That is not the case and may actually help your credit score by demonstrating a long credit history, higher total credit limit, and lower credit utilization. Simply tuck it away in a drawer, and don’t use it. On the other side of the coin, avoid the urge to open any new credit cards or loans. Every time you apply for a card or loan, the lender will perform a hard pull on your credit, which will cause a dip in your score.

When you – and your credit score – are ready to qualify for a mortgage, call on the experienced loan specialists at Mortgage Atlanta. We look forward to the opportunity to help you make all that credit score-building hard work pay off by finding the ideal loan to secure the home of your dreams. If you have questions, we welcome your call at 678.564.1522. If you know your score and are feeling confident, go ahead and fill out our loan application HERE: https://www.mortgage-atlanta.com/loan-application. To learn more about our team and the variety of loan products we feature, visit www.Mortgage-Atlanta.com.


What Is a Good Credit Score? - Experian

23 Ways to Improve Credit in 2023 - Experian

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