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Get Smart About Credit: Real Estate Edition | Credit Tips for Homebuyers🏡
- Christen Ripoli - REALTOR
- Oct 16
- 3 min read
Every third Thursday of October is National Get Smart About Credit Day, and it’s the perfect reminder of how important your credit score is when buying a home. Your credit score isn’t just a number - it’s one of the biggest factors lenders use when deciding your mortgage approval, interest rate, and even the types of home loan programs you qualify for.
The good news? You can take steps right now to improve your credit score before purchasing a home. These credit tips for homebuyers will help you prepare for the process, protect your approval, and set yourself up for long-term financial success.
Credit Tips for Homebuyers Before Buying a House
Getting your finances in order early can make all the difference when it’s time to apply for a mortgage.
Check your credit report early. Review it 6-12 months before applying to catch errors and resolve issues.
Aim for a 700+ score. While FHA loans may allow scores as low as 580, a higher score often unlocks better rates and terms.
Keep credit card balances low. Using less than 30% of your available credit is key (under 10% is even better).
Avoid new credit lines. Hard inquiries and new accounts lower your score and shorten your credit history.
Always pay bills on time. Payment history is the #1 factor in your credit score and late payments can hold you back from mortgage approval.
Credit Tips During the Homebuying Process
Once you’ve been pre-approved, consistency is everything. Lenders want to see stability, so it’s smart to freeze major financial changes until after closing.
Avoid financing big purchases. Cars, furniture, and appliances can raise your debt-to-income ratio and jeopardize approval.
Don’t co-sign loans. Even if you’re just helping family, lenders see it as your responsibility too.
Keep your job steady. Employment stability is critical during underwriting - consider waiting to make career moves until after you’ve closed.
Understand your DTI (Debt-to-Income ratio). Lenders prefer it under 43%. Paying down credit card balances before applying is one of the fastest ways to lower your ratio.
Keep credit activity consistent. Sudden spikes in balances or new accounts can raise red flags with underwriters.
Credit Tips After Buying a Home
Good credit management doesn’t stop once you’ve bought your dream home. Maintaining strong credit helps you refinance in the future, open a HELOC, or move again when the time is right.
Set up automatic payments. On-time mortgage payments build excellent credit history over time.
Plan for refinancing. A stronger score later may qualify you for a better interest rate.
Protect your credit with monitoring. Errors and identity theft can make refinancing harder down the road.
Use credit wisely for home projects. Large balances for renovations can harm your score - explore options like a HELOC for bigger updates.
Why Credit Matters in Real Estate
Here’s a real-life example: if you buy a $350,000 home with a 30-year fixed mortgage, the difference between a 6.25% and 6.75% rate could cost you tens of thousands of dollars over the life of your loan. That’s why these credit tips for homebuyers aren’t just about approval - they’re about long-term savings and financial stability.
Final Thoughts
National Get Smart About Credit Day is the perfect reminder to take control of your credit before making one of the biggest financial decisions of your life: buying a home. Whether you’re planning to purchase in six months or two years, improving your credit now will make the homebuying process smoother and save you money.
If you’re preparing to buy a home, I’d love to connect you with trusted local lenders who can review your credit and give you a personalized mortgage strategy. Together, we’ll make sure you’re ready when the right home comes along.
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