If a mortgage credit check fails, review the credit report for errors and dispute inaccuracies with credit bureaus. Pay down credit card balances to reduce utilization (aim for below 30%), make consistent on-time payments, and consider becoming an authorized user on a trusted person’s account with good credit. If the score remains too low, wait 3-6 months to reapply after improving it. Explore alternative loans like FHA or VA mortgages, which may have lower credit requirements. Seek guidance from a housing counselor or financial advisor to create a tailored plan.

Credit checks fail when scores fall below lender thresholds, typically 580-620 for conventional loans. Improving scores requires addressing derelictions like missed payments or high debt-to-income ratios. The Consumer Financial Protection Bureau (CFPB) reports that 20% of consumers have errors on their credit reports, which can lower scores by 50-100 points if unresolved. Reducing credit utilization by 10% can raise scores by 20-30 points within a year, per Federal Reserve data. FHA loans accept scores as low as 580, while VA loans have no minimum, offering alternatives for borrowers with damaged credit. The National Association of Realtors found that 60% of buyers who received credit counseling secured mortgages within a year. Timely dispute resolution and consistent payment behavior are critical, as 70% of credit score improvements occur after correcting errors or reducing debt. Lenders also consider income stability; a debt-to-income ratio below 43% is ideal for qualified mortgages. Proactive steps to address credit issues increase approval chances by 40-60%, according to Fannie Mae studies.