Preparing Your Credit 90 Days Before a Davis County Mortgage Application

For Davis County buyers, the best use of the 90 days before you apply is getting your credit report accurate, keeping your balances low, paying everything on time, and leaving your accounts alone. You cannot control every part of your score, but you can avoid the mistakes that cost buyers rate and approval at the worst moment.

The goal is not a perfect score. The goal is a report that is correct and a file that looks the same on closing day as it did on application day. Lenders look at both.

Charisse Walker is a real estate agent with Chalker Properties Group in Salt Lake and Davis County, Utah, and a licensed mortgage lender. As a lender I see the same credit patterns again and again, and most of them are fixable with a calm plan and a little time.

Credit changes slowly. A late payment stays on your report for years, but a lower balance can show up in a month or two once your card issuer reports it. A mistake you dispute can take weeks to resolve. Starting three months out gives each of those a chance to finish before a lender looks at your file.

Ninety days also covers a full cycle of reporting for most accounts. If you pay down a card today, the new balance generally appears after the issuer's next statement closes. Apply too early, and the lender sees the old number.

If you are closer than 90 days to writing offers, do not panic. Start anyway. A lender can often tell you which two or three actions matter most for your file.

Pull your credit reports and read them. You are entitled to free reports from the three national bureaus through the federal website AnnualCreditReport.com. Read each one line by line and look for:

• Accounts you do not recognize.
• Balances that look wrong, or paid-off accounts still showing a balance.
• Late payments you know were on time.
• Collections or old debts you thought were settled.
• Misspelled names or old addresses that suggest a mixed-up file.

If you find an error, dispute it in writing with the bureau and keep copies. Disputes can take time, which is one reason to start early. Do not pay a company to do this for you. You can file a dispute yourself at no charge.

Lower them if you can, and pay them on time every month. Your balance compared with your limit is a significant part of your score. Lower is generally better, and the difference often shows up faster than people expect.

Two practical points. First, a card issuer usually reports your balance once a month, around the statement date. Paying before the statement closes can lower the balance that gets reported. Second, do not close old cards to look tidy. Closing a card reduces your total available credit and can raise your usage ratio.

If cash is tight, you do not have to clear everything. Focus on the card closest to its limit. Your lender can model what a payment does for your score range before you commit cash you also need for your down payment and closing costs. The bigger picture on cash is in How Much House Can You Actually Afford in Utah?

Avoid anything that adds new debt or changes your income picture. The most common mistakes are:

• Financing a car, furniture or a vacation. A new loan changes your debt-to-income ratio and adds an inquiry.
• Opening new credit cards, including store cards offered at checkout.
• Missing a payment, even a small one.
• Moving money between accounts without a paper trail. Large deposits need to be explained, and lenders ask for statements.
• Changing jobs without telling your lender first. A move within the same field is often fine. A move to commission pay or self-employment can change how your income is counted.

This applies after you apply, too, all the way to closing. Lenders often pull credit again shortly before closing, and a new account can slow or stop a loan that was already approved.

A little, and not for long. When you apply for credit, the lender pulls your report, and that can lower your score by a small amount. Scoring models usually treat several mortgage inquiries within a short window as a single shopping event, so comparing lenders is not penalized the way opening many unrelated accounts is.

The exact window depends on the scoring model. Ask your lender how it works for the version they use. Shopping for a loan is smart. Do it in a compact period, not spread over months.

The score is a summary, not the whole file. Lenders also look at your payment history, your debt-to-income ratio, your cash for the down payment and reserves, your employment history and the property itself. Two buyers with the same score can get different answers because the rest of the picture differs.

This is why a conversation beats a calculator. If your score is lower than you hoped, there may still be a program that fits. I walk through those in Utah First-Time Homebuyer Loan Programs. Program rules and minimums change, so confirm current requirements with a lender before you decide.

Credit preparation comes before pre-approval, and pre-approval comes before touring homes seriously in Davis County. Once your file is clean, a lender reviews your income, assets and credit and tells you what you can borrow and what the payment would look like.

A pre-approval is only as steady as the file behind it. If you apply for new credit afterward, the numbers can change. I explain the steps in How to Get Pre-Approved for a Home Loan in Utah.

Keep a folder with your recent pay stubs, two years of tax returns, bank statements and a list of your debts. Having it ready shortens the application and shows you what the lender will ask. If something in the file needs an explanation, such as a gap in work or a large deposit, write the explanation down while it is fresh.

Last, build a cushion. Your down payment is one number. Closing costs, moving costs and the first months of ownership are others. A buyer who closes with some cash left over has more room when the furnace needs attention in the first winter.

Here is a typical example, not a specific client. A renter in Davis County plans to buy in about three months. They pull their reports and find a credit card balance that was paid but still shows as open, plus an old address from a former roommate.

They dispute the error, pay their card down before each statement date, set up automatic payments so nothing is late, and hold off on financing a new vehicle. When they apply, the report is accurate, the balances are lower and there is a clean history to support the file.

Nothing dramatic happened. A few steady habits meant a lender had fewer questions and the buyer had more options. That is what 90 days of preparation looks like.

What credit score do I need to buy a home in Davis County?

It depends on the loan program and your overall file. Different programs set different minimums, and they change. A lender can tell you where you stand.

Should I pay off a collection before I apply?

Not always. How a collection is handled depends on the type of loan and the balance. Ask your lender before sending money.

Will checking my own credit lower my score?

No. Checking your own reports is a soft inquiry and does not affect your score.

Can I buy a home if I have recent late payments?

Sometimes, but it limits your options and may raise your cost. Talk with a lender early so you know your timeline.

Does it help to wait to apply until my score goes up?

It can, if the waiting has a plan behind it. A lender can model the change so you know what the wait is worth.

If you are planning to buy in Davis County and want a straight look at your file, reach out to me here. We will make a plan for the next 90 days and see how the rest of the home buying path fits around it.