Credit Advice From a Lending Veteran: What Actually Moves Your Score
Disclosure: Some links in this article are affiliate links. We may earn a commission if you sign up, at no extra cost to you.
After more than 30 years in the lending business, I’ve seen the same credit questions come up again and again. Here is the advice I give people who want better scores — especially before they apply for a mortgage.
1. Know which scores lenders actually use
You have many credit scores, not one. Free apps usually show a VantageScore, while most mortgage lenders still pull FICO scores from all three bureaus. Use free tools to track the trend, but expect the number a lender sees to be different. Read more in why there are different credit scores.
2. Check all three reports, not just one
Each bureau can show different information. Pull your free reports from AnnualCreditReport.com and dispute anything wrong. Errors are more common than most people think.
3. Balances matter more than you think
How much of your available credit you use is one of the biggest score factors. Paying cards down before the statement date — not just by the due date — can raise your score within a month.
4. Don’t close your oldest cards
Closing old accounts can shorten your credit history and raise your utilization. If a card has no annual fee, keep it open and use it lightly.
5. Avoid new credit before a big loan
New accounts and hard inquiries can lower your score and make a lender ask questions. Hold off on new cards, car loans and store financing until after you close on a home.
6. Build history if your file is thin
A credit builder account like Self or a secured card like the Credit Builder Card adds on-time payments to your reports.
7. Watch for changes
Monitoring with Credit Karma or SmartCredit helps you catch fraud and mistakes early.
Ready to fix specific problems? Start with our 4-step guide to fixing your credit.
Affiliate disclosure: some links on this page are affiliate links, and we may earn a commission if you sign up, at no extra cost to you. This article is general education, not legal advice. Dan Frio | NMLS #246527 | PBT Bancorp | NMLS #257781. Mortgage products are originated by PBT Bancorp, NMLS #257781. Equal Housing Lender.