Buying your first home is one of the biggest financial moves you’ll ever make, and it can feel both exciting and overwhelming. But before you start touring open houses or falling in love with that perfect kitchen or bathroom, there’s one thing you should check on first: your credit health.
Your credit is more than just a number; it affects whether you qualify for a mortgage, how much you’ll pay in interest, and even how much home you can afford. In fact, getting your credit in shape before you buy can save you tens of thousands of dollars over the life of your loan.
Here’s how to make sure you’re credit ready, and how to avoid buyer’s remorse later on.
Know Where You Stand
Before you do anything else, pull your credit reports and check your credit score. You’re entitled to a free credit report every 12 months from each of the three major bureaus, Experian, Equifax, and TransUnion, at AnnualCreditReport.com.
Mortgage lenders use your credit score to determine your loan terms. A higher score generally means a lower interest rate and lower monthly payments.
760 or above = excellent credit, best rates
700–759 = good credit, competitive offers
620–699 = acceptable, but rates may be higher
Below 620 = may need to improve before applying
Pay Down Credit Card Balances
Even if you’ve never missed a payment, high credit utilization (the amount of credit you’re using relative to your limit) can hurt your score. Try to keep your credit card balances below 30% of your limit and ideally under 10% for the best score impact
Avoid Taking On New Debt
It’s tempting to finance a new car or open a store card while planning your move — but every new credit inquiry or account can ding your score and affect your debt-to-income (DTI) ratio. Instead, put off large purchases or new loans until after closing. Lenders want to see stable, predictable finances during the home-buying process.
Don’t Close Old Accounts
It might feel like a cleanup move to close old or unused credit cards, but doing so can actually hurt your score. Doing this shortens your average credit history and reduces your total available credit, increasing utilization. Keep the account open and use it sparingly (like for a recurring subscription), and then pay it off each month.
Dispute Errors on Your Report
Mistakes happen. Maybe there’s a missed payment that wasn’t yours, or a paid-off loan that’s still showing as active. Disputing these errors early can boost your score in time for your mortgage application. Start this process at least 3-6 months before applying for a mortgage since disputes can take time to resolve.
Don’t Skip Pre-Approval
Pre-approval isn’t just for sellers; it’s for you. A lender will review your finances and credit to give you a realistic budget. It helps you shop smarter and shows sellers you’re serious. And, as a bonus, you’ll also get a preview of your interest rate based on your current credit profile.
Build a Budget That Reflects Reality
Buying a home isn’t just about affording the mortgage; it’s about affording the lifestyle that comes with it. That includes property taxes, insurance, maintenance, and utilities. Just because a lender approves you for a certain amount doesn’t mean you should max out your budget. Leave room for unexpected expenses.
Watch the Calendar
Improving your credit takes time, but even small changes over a few months can make a big difference. If your score is borderline, it may be worth delaying your purchase by 3–6 months to boost your credit and lock in a better mortgage deal.
Final Thoughts
Your dream home should feel like a milestone, not a financial mistake. By tuning up your credit before you buy, you’ll qualify for better rates, increase your buying power, and lower your long-term costs. Most importantly, you’ll walk into your first home with confidence, not credit-related regrets.
