Planning to buy a house? Learn how to fix your credit before applying for a mortgage, what score you need, and a step-by-step timeline to get mortgage-read
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Aprenda cómo arreglar su crédito antes de solicitar una hipoteca, qué puntaje necesita y un cronograma paso a paso para obtener una lectura hipotecaria.
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Mortgage lenders pull credit reports from all three bureaus and typically use the middle score for qualification decisions. For joint applications, lenders use the lower of the two applicants' middle scores, which means one partner's credit problems affect both borrowers.
Conventional loans backed by Fannie Mae and Freddie Mac generally require a minimum 620 FICO score, though borrowers below 740 pay higher loan-level price adjustments (LLPAs) that increase the interest rate. FHA loans accept scores as low as 500 with 10% down, or 580 with 3.5% down. VA and USDA loans have no official FICO minimum but most lenders impose a 620 floor.
The difference between a 680 and a 760 score on a $350,000 30-year mortgage can exceed $40,000 in total interest paid. Each 20-point FICO improvement in the 620-740 range typically reduces the rate by 0.125% to 0.25%, making pre-purchase credit repair one of the highest-ROI financial moves available.
Federal law entitles every consumer to one free report per bureau annually through AnnualCreditReport.com. Since April 2020, the bureaus have offered free weekly access, a policy extended indefinitely. Pull all three reports before beginning any repair work because approximately 25% of reports contain errors that could lower scores, according to FTC research.
Compare each tradeline across all three bureaus for accuracy. Common mortgage-blocking errors include balances reported as higher than actual, accounts incorrectly shown as delinquent, duplicate collections from the same original debt, and closed accounts listed as open with balances. Identity mix-ups with relatives sharing similar names are also frequent.
Document every error with supporting evidence before filing disputes. For incorrect balances, gather recent statements. For accounts that are not yours, prepare identification documents. For paid collections still showing as unpaid, locate payment receipts or bank records showing the transaction.
Under the Fair Credit Reporting Act (FCRA), bureaus must investigate disputes within 30 days and remove or correct items they cannot verify. File disputes directly with each bureau that reports the error, as each bureau maintains its own database. Online disputes through the bureau websites are fastest for straightforward errors, but written disputes via certified mail create a paper trail useful for escalation.
Target the items with the greatest score impact first. A single collection account or late payment on an otherwise clean file can suppress a score by 60 to 100 points. Focus on recent negative items rather than old ones, since FICO weighting decreases with time. A 30-day late payment from six months ago hurts significantly more than one from four years ago.
If the bureau verifies an item you believe is wrong, submit a second dispute with additional documentation. If that fails, file a complaint with the Consumer Financial Protection Bureau (CFPB). Furnishers who receive CFPB complaints must conduct a more thorough investigation than standard bureau disputes typically trigger.
Credit utilization, the ratio of balances to credit limits, accounts for approximately 30% of a FICO score. Mortgage lenders scrutinize both individual card utilization and aggregate utilization across all revolving accounts. Dropping utilization from 50% to under 10% can increase a score by 50 to 80 points within one billing cycle.
Pay down cards strategically rather than evenly. Prioritize cards closest to their limits first, since a card at 90% utilization damages the score more than two cards at 45%. After reducing individual card utilization, focus on bringing aggregate utilization below 10%. The ideal utilization for maximum FICO points is between 1% and 3%.
Timing matters for mortgage applications. Balances are reported to bureaus on the statement closing date, not the payment due date. To ensure low utilization appears on your report, pay down balances before the statement closes. Contact your card issuer to confirm your statement closing date if you are unsure.
Medical collections under $500 are excluded from credit reports under a 2023 policy change by all three bureaus. For remaining collections, a pay-for-delete agreement, where the collector removes the tradeline upon payment, is the most effective approach. While collectors are not obligated to agree, many smaller agencies and debt buyers will accept this arrangement because recovered revenue outweighs the cost of reporting.
Request all pay-for-delete agreements in writing before sending payment. The agreement should specify the collection account number, the settlement amount, and an explicit commitment to request deletion from all three bureaus within 30 days of payment. Pay by cashier's check or money order rather than providing bank account access to a collector.
For charge-offs still held by original creditors, negotiation options are more limited. Some creditors will update the account status to 'paid in full' or 'settled' but will not delete the tradeline. Under FICO 9 and VantageScore 3.0 and later, paid collections have zero scoring impact, but most mortgage lenders still use FICO 5, 2, and 4, where paid collections still count.
Mortgage underwriters examine the most recent 12 to 24 months of credit behavior. Starting credit repair at least 12 months before an expected purchase date provides enough time for disputes to resolve, utilization improvements to report, and new positive tradelines to age. Applications submitted with less than six months of repair work often show incomplete results.
During months 1 through 3, pull reports, file disputes, and pay down revolving balances. During months 4 through 6, follow up on dispute results, open a secured card if thin-file is an issue, and ensure all accounts report on-time payments. During months 7 through 12, avoid opening any new credit accounts, keep utilization stable below 10%, and do not close old accounts since average account age affects 15% of the FICO score.
In the 90 days before applying, stop all non-essential credit activity. Every new hard inquiry can lower a score by 2 to 5 points, and mortgage underwriters flag recent account openings as risk factors. Get pre-approved rather than pre-qualified, as pre-approval involves a hard pull and full underwriting review, confirming the lender's willingness to fund at a specific rate.
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Lista de verificación
Obtain free reports from AnnualCreditReport.com and compare every tradeline across Equifax, Experian, and TransUnion for discrepancies.
Flag incorrect balances, duplicate collections, misattributed accounts, and wrong delinquency statuses that could suppress your score below lender thresholds.
Submit disputes to each bureau reporting errors, including supporting evidence such as statements, payment receipts, or identification documents.
Reduce utilization below 10% by paying down cards closest to their limits first, timed before statement closing dates.
Request pay-for-delete agreements specifying account number, settlement amount, and deletion commitment from all three bureaus.
Stop opening new accounts or making hard-inquiry applications at least 90 days before submitting your mortgage application.
Preguntas frecuentes
The minimum varies by loan type: conventional loans require 620, FHA allows 580 with 3.5% down (or 500 with 10% down), and VA/USDA loans have no official minimum though most lenders require 620. For the best interest rates, aim for 740 or higher.
Allow 6 to 12 months for meaningful score improvement. Quick wins like utilization reduction can show results within one billing cycle, but dispute resolution takes 30 to 45 days per round, and building positive payment history requires at least six months of on-time payments.
It depends on which FICO model your lender uses. Most mortgage lenders use FICO 5, 2, and 4, where paid collections still count against you. A pay-for-delete agreement that removes the tradeline entirely is more effective than simply paying the balance.
No. Closing old accounts reduces your total available credit, which increases utilization, and shortens your average account age. Both factors can lower your score. Keep old accounts open with zero or small balances.