December 2, 2021

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Credit Advice Before Applying For A New FHA Mortgage

FHA Home Loans And First Time Home Buyers

Do you know how to get your own credit ready for a major loan application like an FHA mortgage? If you want to discuss your home loan options with a participating lender, you’ll want to have worked on your credit for a significant amount of time before your application or pre-qualification process starts.

How much time do you need to get your own credit ready to apply for an FHA mortgage?

Many sources say at least one year is ideal, and the credit reporting agencies themselves urge borrowers to take matters into their own hands and begin reviewing credit reports and monitoring credit.

The shortest answer to the question, “Am I ready to apply for a mortgage” is, “It depends on how long you’ve been working on your credit.”

If you’ve got a record of on-time, every time payments on your financial obligations over the last 12 months, you have a much better chance at FHA loan approval than if you do not.

How do you get your credit ready ahead of your FHA home loan application? There are some simple basic steps to get started:

Monitor your credit. Your credit reports are a key part of the data needed to approve your home loan. If you are not monitoring your credit, how will you know if errors or evidence of identity theft are showing up there? 

Those issues can derail a home loan application. Don’t neglect them til the last months of your planning process.

Pay attention to your account balances on EVERYTHING. We write about this step a lot and that’s because so many tend to overlook this important aspect of credit repair and improvement.

Ideally you want your credit card balances to be around 30% according to credit agency blog posts and credit education articles. 

The key factor here is called “credit utilization” and it’s a measure of how high your balances are; reduce your credit card balances as early as possible for best results.

Stay away from “junk credit” if at all possible. What does this mean?

That store-brand credit card might enable you to make impulse purchases without affecting your bottom line too much, but it’s best to avoid store cards (especially NEW ones) in the year leading up to your mortgage application.

Being a cosigner on someone else’s financial obligations can complicate your home buying process. It’s better to avoid it. That may sound selfish, but if you’re contemplating the largest financial investment you likely have ever made in your life (buying a home), you’ll need to protect your own bottom line first for best results at home loan application time.

Don’t apply for new credit before you close on your home loan. That applies from the moment you begin planning and saving for the mortgage.

That’s a no-brainer, right? But consider how easy it is to forget in the heat of a more impulsive purchase option to resist the offer of a discount at check-out time just for applying for a new Amazon credit card or other options.

You might not even realize the gravity of applying for that new credit card or line of credit…at first.

Most importantly, know your FICO scores, know what habits affect those scores, and how you can improve your own credit reports without paying a third party to do so.

Joe Wallace - Staff Writer

By Joe Wallace

November 1, 2021

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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