How to Fix Your Credit to Buy a House: 5 Simple Tips

Key takeaways

• Most conventional mortgages require a credit score of at least 620, while FHA loans can accept scores as low as 580 with a 3.5 percent down payment.
• Reviewing your credit reports from all three bureaus and disputing inaccurate items is a logical first step, because errors can lower your score without your knowledge.
• Payment history and amounts owed together make up about 65 percent of a FICO Score, so on-time payments and lower balances carry the most weight.
• Avoiding new credit applications in the months before and during the mortgage process helps keep your score and debt-to-income ratio stable.
• Even after you qualify, a higher score can lower your mortgage rate and save tens of thousands of dollars over the life of a 30-year loan.

For many prospective buyers, the question of how to fix credit to buy a house comes down to five practical steps: review your credit reports and dispute errors, pay down debt, address collection accounts, build a strong payment history and avoid new debt before closing. Before you start, it helps to know the score your loan type requires so you can set a realistic target.

The effort can pay off. According to Experian®, the average FICO® Score among mortgage borrowers was 758 in 2024, roughly 40 points above the national average of 715. A home is the largest purchase many people will ever make, and if you have a bad credit score, improving it can raise your approval odds and lower the interest you pay for decades.

Figure out what credit score you need to buy a house

Start by identifying the score your preferred loan type requires, because that number frames every other step. Minimum requirements vary by lender, but common benchmarks include:

• Conventional loans: Typically require a credit score of at least 620, and some lenders look for 660 or higher.
• FHA loans: Backed by the Federal Housing Administration, these loans can accept scores as low as 580 with a 3.5 percent down payment. Borrowers with scores between 500 and 579 may qualify with at least 10 percent down.
• VA and USDA loans: These government-backed programs do not set a strict federal minimum, but many participating lenders look for scores around 620 to 640.

If your score falls below these thresholds, our guide on how to buy a house with bad credit covers additional options. Once you know your target, it helps to understand what drives your score. The FICO scoring model weighs five categories:

• Payment history: 35 percent
• Amounts owed (including credit utilization): 30 percent
• Length of credit history: 15 percent
• New credit: 10 percent
• Credit mix: 10 percent

The tips below focus on the categories that typically carry the most weight, which makes them a practical road map for how to improve your credit score to buy a house.

1. Review your credit report and dispute errors

Any plan for how to fix credit to buy a house should begin with an accurate credit report. Negative items such as late payments, charge-offs, and collections can lower your score, and errors happen more often than many people expect. Mistakes can come from creditors reporting incorrect information, mixed files that combine your records with someone else’s or fraudulent accounts opened through identity theft.

You can review your reports for free from each of the three major credit bureaus (TransUnion®, Experian and Equifax®) through AnnualCreditReport.com. Our guide on how to check your credit score explains how to see the score that goes with each report. As you review, look for common errors:

• Inaccurate missed or late payments
• Account errors resulting from identity theft
• Incorrect personal information
• Closed accounts reported as open

Under the Fair Credit Reporting Act (FCRA), you have the right to dispute inaccurate information on your credit report. You can file a dispute directly with the bureau that reports the error or send a 609 dispute letter to request verification of the information.

2. Pay down your debt

Lenders review your debt-to-income (DTI) ratio, which compares your monthly debt payments with your gross monthly income. Under the 28/36 rule, many lenders prefer that housing costs stay at or below 28 percent of your income and total debt payments stay at or below 36 percent. Our guide to the debt-to-income ratio for a mortgage explains how lenders calculate it.

Paying down credit card balances also lowers your credit utilization, which falls under the amounts owed category that makes up 30 percent of your FICO Score. Lower utilization can help your score while also improving your DTI.

If you are preparing to buy within a year or two, consider a more aggressive repayment plan:

• Debt avalanche: Make minimum payments on every account and direct extra money to the balance with the highest interest rate.
• Debt snowball: Pay off the smallest balance first to build momentum, then roll that payment into the next account.
• Debt consolidation: Combine several high-interest balances into one loan with a lower rate, which can simplify payments.
• Windfalls: Apply tax refunds, bonuses or raises directly to revolving balances rather than spreading them across expenses.

3. Address collection accounts

Collection accounts can significantly lower your credit score and can remain on your credit report for up to seven years. Many collection agencies are willing to negotiate, and you can sometimes settle a debt for less than the full balance.

Before paying, request validation of the debt to confirm the amount and the collector’s right to collect. You can also ask whether the collector will agree to a pay-for-delete letter, though collectors are not required to accept. Some newer scoring models ignore paid collections, and mortgage underwriters may ask you to resolve open collections before closing. If a lender asks about past collections, a letter of explanation can provide context for the issue.

4. Build a strong payment history

Payment history makes up 35 percent of your FICO Score, so consistent on-time payments are central to any plan for how to improve your credit score for a mortgage. Set up automatic payments or calendar reminders for every account to avoid missing a due date, since a payment reported 30 or more days late can stay on your credit report for up to seven years.

If your history is thin, becoming an authorized user can help. A friend or family member with a long record of on-time payments can add you to their credit card, which lets you piggyback on their positive history. As they continue paying on time, the account can strengthen your credit as well.

5. Avoid taking on new debt before closing

During the home-buying process, avoid opening new lines of credit until the loan closes. Each new application can trigger a hard inquiry that may lower your score slightly, and a new account shortens the average age of your credit. New debt can also raise your DTI ratio and signal financial strain to a lender.

Many lenders recheck your credit shortly before closing, so hold off on financing furniture, a car or appliances until after you have the keys. Keeping your accounts stable for three to six months before you apply gives you the clearest picture of where your credit stands.

Consider how your credit score affects mortgage approval and interest rates

Reaching the minimum score for a loan is only part of the picture, because a higher score can also lower your interest rate. Lenders use your score to assess risk, and borrowers with lower scores typically pay more to borrow.

According to Experian, average rates on a 30-year conventional mortgage in October 2026 varied by FICO Score as follows:

• 620: 8.15 percent
• 660: 7.96 percent
• 700: 7.78 percent
• 740: 7.62 percent
• 780 and above: 7.46 percent

Small differences add up. On a $340,000 loan (a $425,000 home with 20 percent down), a borrower with a 620 score at 8.15 percent would pay about $2,530 a month and roughly $911,000 over 30 years. A borrower with a 760 score at 7.54 percent would pay about $2,387 a month and roughly $859,000 in total, a difference of more than $50,000.

Assess your credit before applying for a loan

Knowing how to fix yourcredit to buy a house starts with a clear view of where your credit stands today. Fixing credit to buy a house takes time, but reviewing your reports, paying down balances and addressing collections can put you in a stronger position, and our guide to building credit to buy a home offers additional steps. If you need more time, exploring options while waiting for your finances to improve can keep you moving toward ownership.

If you are unsure whether your reports contain inaccurate items, start with a free credit assessment. Our advocates can help you review your reports, identify potentially inaccurate entries and challenge them with the bureaus and creditors before you apply for a mortgage.

Frequently asked questions about fixing credit to buy a house

Can you get approved for a house with bad credit?

You can get approved for a house with bad credit in some cases, particularly through FHA loans that accept scores as low as 580 with 3.5 percent down. A lower score usually means a higher interest rate and may require a larger down payment, so comparing lenders and options for buying a house with bad credit is important.

How do I fix my credit fast to buy a house?

Learning how to fix credit fast to buy a house usually starts with disputing inaccurate items and paying down credit card balances, since lower utilization can be reflected within one or two billing cycles. Negative information that is accurate generally takes longer to fade, so starting several months before you apply gives you the most room to improve.

Should I pay off collections before applying for a mortgage?

Paying off collections before applying for a mortgage is often wise, because some lenders require open collections to be resolved before closing. Ask the collector to validate the debt first, and request any settlement or payment agreement in writing.

Note: The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

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