Your credit score is arguably the single most important factor when you’re applying for a mortgage. Yes, other things such as your debt-to-income ratio and how much cash you have for a down payment come into play. But your credit score is what essentially tells lenders how well you manage your finances, so it’s a major factor. Let’s look at the steps to improve your credit so you can buy that dream house you’ve always wanted.

Step #1: Pay Your Bills on Time

Yes, it’s as simple as paying your bills on time.

According to Experian, your payment history is the single most important thing affecting your credit score. This makes sense because your credit score is meant to reflect how well you pay your bills.

If you always pay your bills on time, that’s a good sign. It shows you are responsible and make sure your creditors are getting what they’re owed.

If you miss a lot of payments, that’s a bit concerning for lenders. This in turn will negatively impact your credit, which will then make it harder to get a great mortgage.

So Step #1 is to catch up on all of your bills and stay caught up.

Step #2: Pay Down Your Debt

The second thing you want to do is figure out what you can do to pay down your recurring debts. According to, the amount of debt you owe makes up 30% of your credit score.

Again, this makes sense from a logical standpoint. If you have $10,000 in debt right now and in 6 months it’s down to $2,000, that shows lenders you have the income you need to pay down your debt. Fewer debts owed to creditors mean you have more money to pay your mortgage.

It’s not easy to pay down your debts, but it’s important to improve your credit. Do what you can to both cut expenses and make a little extra money. Over ⅓ of Americans have a side hustle so you won’t be alone trying to make this happen!

Step #3: Expand Your Credit Mix

Let’s make up a scenario where we compare two different people.

Jane has $20,000 of debt. She has a car loan, some student loans, and a little credit card debt.

John has $20,000 of debt. He’s racked up his credit cards to pay for his living expenses. He could have applied for a car loan and student loan but didn’t want to deal with the hassle.

Who do you think has the better credit score? There’s no guarantee, but there’s a good chance it’s Jane.

The credit bureaus (TransUnion, Experian, and Equifax) would rather see multiple types of credit to your name than just one. Having several types of loans shows your financial maturity and knowledge, as you have experience with several types of loans and lenders. If all of your credit comes from one source, you don’t have as much experience, which will negatively impact your credit score.

We aren’t saying you should go out today and take out a bunch of loans for no reason. But do what you can to improve your credit mix:

  • If you’re taking classes and don’t have student loans, consider getting one.
  • If you don’t have a credit card yet, think about signing up for one with a low balance.
  • If no utilities (electric, water, cable, etc.) are in your name, get on the paperwork.

Yes, there’s some work involved. But your credit score plays a major role in how your mortgage rate is calculated. You want to have a good score so you can save a ton of money in the long run.


We hope these steps to improve your credit were helpful to you. We know how important it is to get a great mortgage, so we want to help you every step of the way.

If you have any questions about the mortgage process, give us a call at (775) 688-9100 or send us an email and we’ll be in touch soon!