How to Improve Your Credit Score Before Applying for a Mortgage

Your credit score plays a major role in whether you get approved for a mortgage—and at what interest rate. Even a small increase in your score can save you tens of thousands over your mortgage term. The good news? Improving your credit score is completely possible with the right strategy.

Here’s how to get mortgage-ready in the fastest and smartest way.

🧠 Why Your Credit Score Matters for Mortgages

Lenders use your credit score to determine:

• Whether you qualify

• What interest rate you get

• How much mortgage you can borrow

• Whether you need extra documentation

In Canada, mortgage lenders typically look for:

• 680+ → Best rates and programs

• 620–679 → Good approvals, fewer lenders

• Below 600 → Alternative/B-lender options

The higher your score, the better your mortgage.

💳 1. Keep Your Credit Utilization Below 30%

Credit utilization = balance ÷ limit.
This is the fastest way to raise your score.

Example:

Limit = $5,000
Balance should be under $1,500

If you can bring utilization under 20%, even better — that’s where the biggest score boosts happen.

🧾 2. Always Pay Bills on Time — Every Time

Payment history makes up 35% of your credit score.
Even one late payment can drop your score by 60–120 points.

Set up:

• Auto-pay for minimum payments

• Calendar reminders

• Alerts through your banking app

Timely payments = stable, healthy score.

🎯 3. Avoid New Credit Inquiries Before Applying

Every hard inquiry lowers your score slightly.

Avoid:

• New credit cards

• Car loans

• Personal loans

• Store financing accounts

During mortgage preparation, stay credit-quiet for at least 3–6 months.

🧹 4. Pay Down High-Interest and Revolving Debt

Lenders take monthly liabilities seriously.
Lowering these balances helps your:

• TDS ratio

• GDS ratio

• Credit score

• Overall mortgage affordability

You’ll qualify for more mortgage and better rates.

📑 5. Check Your Credit Report for Errors

Over 25% of Canadians have mistakes on their credit file.
Watch for:

• Wrong balances

• Accounts that don’t belong to you

• Duplicate entries

• Incorrect late payments

Dispute errors with Equifax or TransUnion to see improvements in 30–60 days.

🧓 6. Keep Old Credit Accounts Open

Credit history length matters.
Closing an old account can:

• Reduce your average credit age

• Increase utilization

• Drop your score

Keep older accounts open and active (even with small recurring charges).

📈 7. Build a Healthy Credit Mix

Lenders like seeing a balance of:

• Credit cards

• Car loans

• Student loans

• Installment credit

A strong mix supports long-term score growth.

🛑 8. Avoid Maxing Out Cards or Going Near the Limit

High balances—even if paid on time—hurt your score.
Stay under 50% at all times, and ideally under 20–30%.

🔍 9. Don’t Close Accounts Before Applying for a Mortgage

Many Canadians mistakenly close accounts thinking it helps.
Actually, it can:

• Reduce available credit

• Spike your utilization

• Lower your score

Keep accounts open until after your mortgage closes.

🧮 10. Use a Mortgage Broker for Credit Strategy

Brokers can:

• Pull soft checks

• Suggest which debts to pay down

• Help structure your file

• Access lenders with more flexible credit rules

Sometimes we can qualify borrowers banks decline.

💡 Bonus: How Long Does It Take to Improve a Credit Score?

Most borrowers can see meaningful improvements in:

• 30 days → Lower balances, fix errors

• 60–90 days → Payment consistency

• 6 months → Strong credit profile

Plan your mortgage application with this timeline in mind.

🚀 Final Thoughts: Credit Is the Foundation of Your Mortgage Approval

Improving your credit score isn’t just about getting approved—it’s about saving money for the next 25 years. A stronger score means:
✔ Lower interest rate
✔ Higher purchase price approval
✔ Easier qualification
✔ More lender options

Start improving your credit early, stay consistent, and work with a mortgage expert who can guide you.