Preparing Your Credit Score for Homeownership

By Marcus McCue, Executive Vice President & Chief Business Development Officer, Guardian Mortgage Company, Inc.


Sure, saving for a down payment is important, but too many home buyers get caught up in the “save, save, save” mindset, only to find themselves with a bad deal and a huge mortgage payment down the road.

Why? Because they neglected their credit along the way.

You see, your credit plays a huge role in the type of mortgage loan (and the mortgage rate) you can get when buying a home. While putting away a thousand a month could certainly help you put a chunk of change down up front, you might actually be better served by putting those funds toward your credit card debt, student loans, car payments or other outstanding lines of credit you have open.

The truth is, the best use of one’s money varies from person to person. The important thing is you take a long hard look at your credit score – and credit history – long before you consider buying a home. You need to:

  • Run your credit report. Get your free annual credit report from Experian or Equifax, and pay the small extra fee to get access to your credit score. The minimum you’ll need to secure a mortgage loan is a score of 580, but keep in mind, the lower your score is on the spectrum, the higher mortgage rate you can expect – and that means more interest (and more money spent) in the long run.
  • Look at your credit history. You should also look at the credit history on your report. How long have you had lines of credit open? What has your payment history been like? Lenders look for borrowers who have proven their ability to make payments reliably over time. The more you’ve paid your bills on time, the better borrower you make.


  • Find room for improvement. If you only have one or two lines of credit, have had a spotty payment history or your credit score is low, you definitely have some room for improvement. Instead of getting yourself deeper into debt with a mortgage loan now, consider how you can make your current credit report look even better. If you have a low score, work on paying down your outstanding debts and making payments on time, every time. If you’re short on lines of credit, open up a new credit card and use it for daily purchases. Then, every week, pay it off in full from your debit account. It’s a great way to boost your score and give yourself better credit history at the same time.
  • Avoid making big purchases. The fastest way to make a bad credit situation look even worse is to make a big purchase right before you apply for a mortgage. This sends up an immediate red flag to your lender, signaling that you might be more than a little irresponsible with your money. Steer clear of any big purchases if you’re preparing to buy a home, and save big-ticket items for later, once you’re settled in at your new place.
  • Run your credit again. Once you’ve done some work, run your credit report again (keep in mind, you will have to pay if it’s within a one-year period). Check to see how your score has improved and what your credit history looks like after putting in the time. If you’ve seen a boost in either, you’re probably safe to apply for pre-qualification, which will give you an idea of what sort of mortgage loan and rate you could currently secure.

Preparing your credit for homeownership is crucial – especially if you want a great rate with a great lender. Want to know what your current credit would garner you? Contact a loan officer and apply for pre-qualification today. We’re here to help.


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