Cover story: Raising credit score for a home loan

“Some people’s credit scores have been damaged when their credit card company reduces their credit limit,” Mr. Davis said. “While it may not always work, you can call your credit card company to see if they will restore your limit so that it doesn’t look as if you have maxed out your card.”

In addition to credit card debt, Mr. Davis said some consumers have items on their credit report that are dragging down their credit score. It may be in their best interest to pay off those items.

“If you didn’t pay a D.C. parking ticket from 10 years ago because you didn’t deserve to get it, that parking ticket could cost you $750 now and be hurting your credit score,” Mr. Davis said. “It’s better to pay $200 for something like a medical collection or an old parking ticket rather than not qualify for a loan or pay thousands of dollars because of higher interest rates over 30 years.”

If you have disputed claims on your credit report, you will need to resolve those issues before a loan can be approved, Mr. Stanger said.

“Removing a dispute won’t necessarily send your credit score up,” Mr. Stanger said. “In fact, it could even lower your credit score. But until it’s resolved, we don’t really know what your true credit score is.”

Some loan applicants have a problem that shouldn’t be one: a lack of credit card use.

“It’s a Catch-22 that you need a credit history in order to get a loan,” Mr. Defngin said. “You need to open a credit card and use it and then pay it back on time in order to build a credit history. You need to use it for one or two months to show a repayment history.”

Mr. Stanger said applicants without credit card debt can improve their score if they use a dormant credit card to charge something and then repay it.

“Sometimes the only option for someone without a credit history is to try for a loan approval based on nontraditional credit history, such as rent payments, insurance payments and utilities,” Mr. Davis said. “Other than that, they may have to wait while they build a regular credit history.”

Making long-term changes in your financial habits will do the most to improve your credit score, but for a short-term fix, borrowers should consult with a responsible lender who can make specific suggestions tailored to the individual’s needs.