If buying a home is on your to-do list this year, your credit score deserves a spot right at the top. While some loan programs allow buyers to qualify with scores in the 500s, stronger credit opens the door to more loan options, better interest rates, and greater buying power overall.
There’s no overnight fix for credit, but the good news is that small, strategic steps can make a meaningful difference—sometimes enough to help you qualify or secure a better rate. Just as important, they can help you avoid common missteps that could set you back.
Be Strategic About Collection Accounts
Not all collection accounts affect your credit the same way. In some cases, paying off older collections won’t significantly improve your score. However, addressing newer collections may lead to an increase—especially if the creditor agrees to report the payment to the credit bureaus.
Financial experts often recommend paying the original creditor rather than the collection agency when possible. A knowledgeable mortgage lender can help you determine which accounts to pay, how much to pay, and the best order to do so.
Pay Down Credit Card Balances
According to NerdWallet, the amount you owe makes up about 30% of your FICO score. This includes credit utilization—how much of your available credit you’re using. High utilization can signal financial strain, while lower balances show responsible credit management.
A good rule of thumb is to keep credit card balances at 30% or less of your available limit. Reducing balances can be one of the quickest ways to see a credit score improvement.
Consider the Right Kind of Credit
It may sound counterintuitive, but responsibly using a credit card can actually help build your credit. As Credit Card Insider notes, a credit card can be a cost-effective way to establish or strengthen credit—as long as balances stay low and payments are made on time, every time.
Take Advantage of Experian Boost
Experian Boost is a free tool that allows you to add on-time utility and cell phone payments to your Experian credit file. Since payment history is a major factor in credit scoring, consistently paying these bills on time could give your score a helpful lift—especially if you have a limited credit history.
Review and Dispute Credit Report Errors
Mistakes on credit reports happen more often than you might think. Experian recommends checking your credit reports with all three bureaus and reviewing them carefully. Incorrect account information or outdated balances can unnecessarily drag down your score. If you find errors, dispute them promptly to have them corrected.
Set Up Automatic Payments
Payment history accounts for roughly 35% of your credit score, making it the single most important factor. Late payments—even accidental ones—can be costly. Setting up automatic payments helps ensure your bills are paid on time and can even come with perks, as some service providers offer discounts for enrolling.
Improving your credit score takes time, but the payoff can be well worth it when you’re preparing to buy a home. With the right strategy and guidance, you can put yourself in a stronger position to qualify—and to make the most of your homebuying journey with Jet Direct Mortgage.
Experienced Chief Operating Officer with a 26 + year demonstrated history of working in the banking industry. Skilled in all aspects of the residential mortgage market . Strong business development professional with a Bachelor of Science (BS) focused in Business Administration and Management, from St. Joseph College. A direct endorsement underwriter and a licensed Mortgage Loan Originator.
