Long Term Habits to Improve Your Credit Score Beyond The Basic Number

A great credit score doesn’t guarantee you a mortgage loan. In fact, if you don’t have multiple lines of credit or strong credit history to go along with it, it could hurt your homebuying chances immensely.

Financial institutions and mortgage lenders know that you’re more than just a credit score, which is why they look at the whole financial picture before making a decision on your mortgage loan application.

Are you worried your credit won’t qualify you for a mortgage? Have you been told by a mortgage lender that you don’t qualify, even though your credit score is 700+?

Fortunately, all homebuying hope isn’t lost. There are several steps you can take to improve your credit and, subsequently, your shot at getting a mortgage loan.


Lenders want to see multiple credit lines to your name, so if you only have one (or none), consider opening a few more cards or accounts before you apply for a mortgage loan. You can…

Apply for a secured credit card.

These are easy to get with little or no credit, as they require an up-front cash deposit to protect the card company in case you miss a payment. Just make sure you choose a company that reports to all three credit bureaus each month (and consider the card’s fees, too).

Try a credit-builder loan.

Often offered by credit unions, these loans are designed to help you build credit without racking up debt. You make monthly payments, which are then held in an account until you’ve fully repaid the loan amount. At that point, the funds are released (sort of like a forced savings program).

Get a small personal loan.

The best time to build credit is when you don’t need the money.  Get a small personal loan (say $4-$10k), but DON’T spend the money. Instead, keep it in your bank account and make sure your payment towards your personal loan is taken out automatically from your bank account.  Pay it off in a year or so, and you’ll credit report will thank you for it!


You’ll also need at least a year’s history with each credit line. If your credit history is lacking, opening a new account and waiting at least a year to apply for your mortgage loan is your best bet. You can also…

Ask a loved one to add you as an “authorized user.

If mom, dad, a sibling, a grandparent, or significant other can add you as an authorized user on one of their existing credit accounts, this can help your credit, too. Be sure to choose a loved one who you know will stay current on their payments or this could actually hurt your credit in the long run.

Ask your landlord to report your rent payments.

If you’re currently renting, ask your landlord or property manager if they can report your monthly payments to the three major credit bureaus (Experian, TransUnion and Equifax). If they’re not able to, consider a service like RentTrack to do it for you.


Finally, lenders want to see that you use your credit responsibly. To gauge this, they’ll calculate your credit utilization rate — how much you owe on your accounts vs. the total spending limit across them. The less your rate is, the better.

If your rate is high, you’ll want to:

Pay down some of your debts.

Work on paying down your existing debts, starting with the highest-interest ones first. This will free up more cash and help you pay off your debts quicker.

Ask your credit card companies to increase your limits.

If you’ve had a card for a while (and paid it off regularly and responsibly), the issuer may be willing to increase your credit limit. When this happens, it lowers your credit utilization rate and helps your chances of getting a loan.


If you’re really concerned about your credit, you can also consider a co-signer for your mortgage loan. The lender will then consider both your and the co-signer’s credit when evaluating the application. As long as you choose someone with a solid score and deep credit history, it should help your homebuying prospects immensely.

Want more help prepping your finances for that home purchase? Get in touch with a SnapFi loan expert today. We’re here to help.

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