How to Improve Your Credit Score Before Applying for a Mortgage

When you apply for a mortgage, your credit score is one of the first things lenders check. A higher score means better rates, more lender options, and easier approval. A lower score can mean higher rates, limited options, or even rejection.

The good news? You can improve your credit score relatively quickly with the right actions.

What Credit Score Do You Need?

Most major banks (A-lenders) want to see a credit score of at least 650, with 680+ being ideal. Below that, you'll likely be looking at alternative lenders with higher rates.

Step 1: Check Your Credit Report

Before you can improve your credit, you need to know where you stand. Get your free credit report from:

• Equifax Canada: equifax.ca
• TransUnion Canada: transunion.ca

Review your report for errors — wrong addresses, accounts that aren't yours, incorrect balances. Dispute any inaccuracies immediately, as they can drag down your score unfairly.

Step 2: Pay Everything On Time

Payment history is the biggest factor in your credit score — about 35% of the total. One late payment can drop your score by 50-100 points.

Step 3: Lower Your Credit Utilization

Credit utilization is how much of your available credit you're using. It accounts for about 30% of your score.

The rule: Keep utilization below 30% on each card and overall. Below 10% is even better.

Example: If you have a $10,000 credit limit, try to keep your balance below $3,000. If you routinely carry $8,000, your utilization is 80% — that hurts your score significantly.

Quick fix: Pay down balances before your statement closes, not just before the due date. The balance reported to credit bureaus is usually your statement balance.

Step 4: Don't Close Old Accounts

Length of credit history matters. That old credit card you never use? Keep it open (assuming no annual fee). Closing it shortens your average account age and reduces your total available credit — both hurt your score.

Step 5: Limit New Credit Applications

Every time you apply for credit, a "hard inquiry" appears on your report. A few inquiries are fine, but many in a short period suggests desperation to lenders.

Step 6: Have a Healthy Credit Mix

Lenders like to see you can handle different types of credit responsibly. A mix might include:

• Credit cards (revolving credit)
• Car loan or line of credit (installment credit)
• Phone plan or utility bills in your name

You don't need all of these, but having only one credit card as your entire credit history is thin. If you have no credit, consider a secured credit card to start building.

How Long Does It Take?

Credit improvement isn't instant, but you can see results relatively quickly:

• Paying down balances: 30-60 days to reflect
• Disputing errors: 30-45 days for investigation
• Building payment history: 3-6 months of on-time payments
• Recovering from missed payments: 6-12 months
• Recovering from collections: 12-24 months

If you're planning to buy in 6 months, start working on your credit now. If you're buying sooner, we can still find options — but your score may limit which lenders we can use.

What NOT to Do

• Don't pay for "credit repair" services: Most are scams. You can do everything they do for free.
• Don't close all your credit cards: This reduces your available credit and history length.
• Don't max out cards then pay them off: The high utilization still gets reported if timed wrong.
• Don't ignore collection accounts: Sometimes paying them can actually hurt your score temporarily. Talk to a professional first.

Your Action Plan

1. Pull your credit report from Equifax and TransUnion
2. Dispute any errors you find
3. Set up automatic payments on all accounts
4. Pay down credit card balances below 30%
5. Stop applying for new credit
6. Keep old accounts open
7. Wait and let your improvements reflect (30-90 days)

A higher credit score doesn't just help you get approved — it can save you thousands in interest over the life of your mortgage. Even a 0.25% rate difference adds up significantly over 25 years.