To improve a credit score for home purchase, prioritize paying bills on time, reduce credit utilization to below 30%, check credit reports for errors, and consider a secured credit card if needed. Avoid new credit inquiries and maintain a stable credit history.

Payment history and credit utilization are critical factors in credit scoring. Payment history accounts for 35% of a FICO score, while credit utilization (the ratio of credit used to credit available) makes up 30%. Consistently paying bills on time builds trust with lenders, and lowering credit utilization to under 30% can significantly boost scores. Data from myFICO shows that 62% of consumers with scores above 800 have payment histories free of late payments, while those with scores below 600 often have multiple late payments. Reducing credit utilization to under 30% can raise scores by 50–110 points, according to the Consumer Financial Protection Bureau (CFPB). Additionally, 20% of consumers have errors on their credit reports, which can lower scores by 50 points or more, as reported by the Federal Trade Commission (FTC). Secured credit cards are recommended for those with thin credit files, as they help build positive payment history. New credit inquiries can lower scores by 10–15 points, as they trigger a hard pull on credit reports. Lenders typically require a minimum score of 620–640 for home loans, but scores above 730 qualify for the best rates. For example, Quicken Loans data shows that 75% of approved homebuyers have scores above 700. Addressing these factors systematically can position buyers for mortgage approval and favorable terms.