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How to Prepare Your Credit for a Mortgage Approval

If you’re eager to move into your dream home, preparing your credit for a mortgage approval should definitely be on your agenda. Laura gives six tips for building credit before you apply for a mortgage, so you get a loan that costs as little as possible.

By
Laura Adams, MBA
8-minute read
Episode #450

Tip #6: Shop strategically for a mortgage

The last tip is to carefully plan when you’ll apply for and shop different mortgage lenders. Applying for a new credit account is called a hard inquiry and it dings your scores. However, a cluster of similar applications completed within a short period of time, such as 2 to 3 weeks, won’t hurt as much.

Credit scoring models recognize typical shopping behavior and won’t penalize you for comparing offers. So come up with a list of lenders you want to shop and apply for multiple loans quickly.

Also, this not the time to shop for a new car, open retail store cards, or new credit cards. Wait until after you’ve moved into your new home to make any new credit requests so they don’t spoil your mortgage terms.

Remember that every credit score point counts! Use these tips as far in advance of buying a home as possible to avoid getting turned down for a mortgage or paying more than you should.

For more tips on how to review, repair, and build your credit, check out my free Credit Score Survival Kit. It’s a multimedia tutorial that includes a video, audio, and e-book that teaches you 3 smart and legitimate strategies to build excellent credit.

See also: How to Get Credit With No or Bad Credit

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.