Credit Score Basics — What Lenders Actually Look At

The short version: Your credit score affects your interest rate more than almost anything else you control at this stage — and small, fixable habits in the months before applying can move that number more than people expect.

What actually makes up your score

Broadly: payment history matters most, followed by how much of your available credit you're using (utilization), the length of your credit history, the mix of credit types you have, and recent inquiries. None of these are secret, but most people have never seen them broken out plainly.

The one factor worth acting on immediately: utilization

Credit utilization — the percentage of your available credit you're actually using — has an outsized, fast-acting effect on your score. Paying down credit card balances even a few weeks before applying can produce a real, visible score improvement, faster than almost anything else on this list.

The mistake that catches people off guard: new credit right before closing

Opening a new credit card, financing a car, or taking on any new debt between pre-approval and closing can change your debt-to-income ratio enough to affect your final approval — sometimes seriously. Lenders often re-check credit close to closing specifically to catch this. The simplest rule: keep your financial picture as boring and unchanged as possible until after you've closed.

What actually moves your score, and what doesn't (much)

• Moves it meaningfully: paying down revolving balances, correcting actual errors on your credit report, making on-time payments consistently over time
• Moves it a little: the average age of your credit accounts, your mix of credit types
• A common myth: checking your own credit report hurts your score — it doesn't. Checking your own report is a "soft" inquiry with no impact; only "hard" inquiries from actual credit applications have a (small, temporary) effect.

What to actually do a few months before applying

Pull your own credit report (you're entitled to a free one from each bureau) and check for actual errors — these are more common than people assume, and disputing a real error can meaningfully move your score. Many credit cards also show your score for free right in their app, an easy way to keep an eye on your progress without pulling a full report every time. Pay down revolving balances where you can, and avoid opening any new credit accounts until after closing.