Tips to Improve Credit Score Before Buying a Home
Written by Graham Team · Graham Team Real Estate Advisors — Henderson & Las Vegas, NV · Contact
Learn how to improve your credit score before buying a home in Las Vegas. Discover tips on credit limits, balances, and mortgage rate savings in…
Dated: January 17 2025
Tips to Improve Your Credit Score Before Buying a Home
If you're in a position where you're waiting for mortgage rates to go down before you buy a house, this waiting period is crucial. While you're waiting for rates to drop, there are some things you can do to prepare for when the time comes to buy.
Gidget, our awesome broker from the Graham Team, sat down with Joe, our partner loan officer at New American Funding, to chat about this very topic. Curious to hear what they had to say?👇
What's going on with interest rates? - Part 1
What's going on with interest rates? - Part 2
Tips to improve credit scores – Balances vs. Credit Limits
Paying Off Card Before Statement Balance
Things that may hurt your credit
Tips to improve credit: the difference of 0.25 points on a mortgage payment
Graham Team Real Estate • (702) 930-9551 • Team@grahamteamnv.com
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3007 W Horizon Ridge Pkwy, Ste. 210, Henderson, NV 89052
Frequently asked questions
What is the best credit utilization ratio to aim for when trying to improve my credit score?▾
To best improve credit score before buying a home, aim to keep your credit utilization ratio below 30%, and ideally under 10%. This means your outstanding balance on any credit card should never exceed 10% to 30% of that card's total limit, as lenders look closely at this metric.
How does paying my credit card balance before the statement date help my score?▾
Paying off your balance before the monthly statement closing date—rather than just the due date—is one of the best tips to improve credit score before buying a home. It ensures a lower balance is reported to the credit bureaus, instantly lowering your utilization rate and boosting your score.
What common financial mistakes should I avoid before applying for a mortgage?▾
To successfully improve credit score before buying a home, avoid opening new credit cards, taking out auto loans, or closing old accounts during the homebuying process. Additionally, do not make large purchases on existing credit cards, as these actions lower your average account age and raise utilization.
Why does a minor credit score increase make a difference when buying a home?▾
Even a small credit score bump can move you into a higher credit tier, reducing your mortgage interest rate by 0.2% or more. Utilizing strategic tips to improve credit score before buying a home can save you tens of thousands of dollars in interest over the lifespan of your mortgage.
How far in advance should I start working on my credit score before buying a home?▾
You should begin executing tips to improve credit score before buying a home at least three to six months before applying for a mortgage. This timeline gives credit bureaus enough time to report updated balances, resolve dispute errors, and reflect positive payment histories on your credit report.
Should I close my unused credit card accounts to improve my score?▾
No, do not close unused credit cards. Keeping them open maintains your established history and total available credit limit. Closing them reduces your overall credit capacity, which artificially spikes your utilization ratio and works against your efforts to improve credit score before buying a home.