Step 4 · Education-only

Credit Readiness Guide

Your credit profile is the first thing a lender evaluates and the hardest thing to fix overnight. The good news: small, deliberate moves in the 60–90 days before you apply can make a real difference. Start early, then freeze your profile and let it sit.

Education only, not financial advice. General information about credit behavior — not personalized advice, and not a guarantee of any score or approval outcome. For complex situations (bankruptcy, collections, disputes), a nonprofit HUD-approved housing counselor is a good free resource.

Do these

1. Pull your reports and read all three

Get your free reports from the three major bureaus and read them line by line. Look for accounts you don't recognize, wrong balances, duplicate collections, and old addresses. Errors are common — and disputable.

2. Dispute errors early

If you find mistakes, file disputes with the bureau reporting them as soon as possible. Disputes can take 30+ days to resolve, and an active dispute can complicate underwriting — so do this first, not the week you apply.

3. Pay down revolving balances

Credit utilization — balances relative to credit limits — is one of the fastest-moving score factors. Paying cards well below 30% of limits helps; getting under 10% is better. Pay early in the billing cycle so the lower balance is what gets reported.

4. Keep every payment on time

A single 30-day late payment in this window can hurt more than months of good behavior help. Autopay minimums on everything; you can always pay more manually.

5. Keep old cards open

Closing your oldest card shortens your credit history and can spike your utilization. Leave it open with a small recurring charge on autopay instead.

Do NOT do these

Don't open new credit

New cards, furniture financing, car loans — every new account lowers your average account age and adds an inquiry. Lenders also re-pull credit before closing; a new account between pre-approval and closing can derail the loan.

Don't close old accounts

Same reason as above, in reverse: it shrinks your available credit and history length at exactly the wrong time.

Don't make large unexplained moves

Big deposits, big transfers between accounts, or paying off a collection without a plan can all raise underwriting questions. If you must move money, document everything.

Don't co-sign anything

Co-signed debt counts against your debt-to-income ratio even if someone else pays it. No exceptions during the homebuying window.

A word on score targets

Minimums vary by loan type — conventional loans generally want higher scores than FHA loans, for example — and the score a lender pulls (a mortgage-specific FICO) often differs from the score you see in a free app. Don't chase a magic number from an app; aim to present the cleanest, most stable profile you can, and let your lender tell you exactly where you stand.

Next: the 8-week timeline planner →