Higher FICO scores (or credit scores) are a necessity when buying a home. Credit scores range from 300 to 850. Any score above 670 is considered very good to a mortgage lender. Without an established consistent record of credit however, often new prospective home buyers find themselves with a too-low score, hindering their ability to secure approval for a mortgage.

This is not permanent! There are ways to boost your credit score and qualify for a better mortgage rate. Better mortgage rates mean you’ll pay less in interest over the life of your mortgage loan – and this could save you tens of thousands of dollars.

Tips to boost your credit score:

  • Check your credit report with all three credit bureaus and look for errors that need correcting, disputing anything that is not correct
  • Reduce your debt – when you pay down your credit cards your improve your score
  • Make consistent payments on all of your debt, both loans and credit cards
  • Never max out your credit cards and only charge what you can reasonably pay off each month

  • Try to keep your debt to income (DTI) ratio below 43% – as in, your monthly expenses shouldn’t total more than 43% of your monthly income

Some of these techniques will show a change in your score in a matter of days and some can happen slowly over the course of a year of consistent behavior. Demonstrating solid payment history is key to boosting your credit score.