Here’s how to build credit to buy a house

Credit plays a huge role in the home-buying process. It also affects the interest rate you receive on your loan, as well as the long-term costs of borrowing the money. So if you have a low credit score or no credit at all, that can definitely hold back your home-buying dreams — or at least make it more expensive. Here’s how you can build your credit fast to buy a house.

1. Pay down your balances.

Credit utilization — or how much of your total credit line you’re actually using — accounts for nearly a third of your credit score. You can improve your credit utilization rate by lowering your balances or asking for a credit line increase.

Ideally, lenders want to see a credit utilization rate of 30% or less, meaning if you have a $10,000 credit line, you use less than $3,000. In general, the lower you can keep your credit balances, the better.

2. Set your bills on autopay.

The biggest factor in your credit score is your payment history. In fact, it accounts for a whopping 35% of your total score. 

To ensure your payment history is stellar, opt for autopay where possible. If that’s not an option, set yourself a reminder a few days before each payment is due just to be safe. Late payments can hurt your score tremendously.

3. Get added as an authorized user on someone else’s credit card.

If you have a spouse or loved one with great credit and a history of on-time payments, you can ask to be added as an “authorized user” on their account. This technically gives you the ability to use whatever card they’ve added you to, though doing so isn’t necessary to enjoy the benefits. Instead, just sit back and reap the credit boost by association. 

4. Report any errors on your credit report.

There’s a chance your low score is due to errors on your credit report. Things like inaccurate late payments, incorrect account balances, or even fraudulent accounts can all result in serious dings to your credit. 

Make sure to pull your credit report every few months (you get a free one from all three credit bureaus once per year), and check it for potential errors. If you spot any, tell the reporting bureau immediately. Rectifying it could give your score a significant boost.

Great credit takes time

Keep in mind that these tips won’t improve your score instantly. You should allow anywhere from six months to a year to really optimize your score. This will give you the best shot at building credit to buy a house (and doing so affordably).

3d rendering of a row of luxury townhouses along a street

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