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Banks use several factors to determine how to approve someone for a mortgage loan, including credit score and debt-to-income ratio. KeyBank’s 2025 Financial Mobility Survey found that many believe owning a home is not an attainable goal for themselves nor the average American. Survey respondents also said financial education can help them be more confident in the home-buying process.
Here are some tips that can help you improve your credit score.
Get to Know Your Credit Score
While there are many factors that mortgage lenders consider, your credit score is one of the most important. Your credit score is made up of multiple data points from your credit history, including how long you’ve had credit, the timeliness of your payments, the types of credit you’ve had, the percentage of your credit you’re using, and any new credit you’re applying for.
In short, your credit score represents your creditworthiness, or the likelihood that you’ll repay a loan on time. When applying for a mortgage, the higher your credit score, the more likely it is that you’ll get a lower interest rate on your loan. If your credit score isn’t quite there, there are many ways to help improve it:
Make payments on time - Setting up automatic payments for the minimum amount due can help your accounts remain in good standing.
Catch up on overdue payments - If you have any bills that are past due, prioritize those first.
Pay down revolving balances - Once you’re current on all your bills, use any extra cash to keep paying down your balances.
Correct any errors on your credit report - If you find inaccurate personal information on your credit report, visit the credit bureau’s website to see how to file a dispute.
Keep existing credit lines open - Even if your spending doesn’t change, keep the line of credit, like a credit card, open. It can show a decrease in your credit utilization ratio to help improve your score.
Limit new applications for credit - Weigh the impact to your credit score when you’re deciding whether to do anything that will result in a hard pull on your credit, like buying a new car or applying for a new credit card.
It can take up to six months to see noticeable results.
Pay Off Your Debt to Increase Credit Score
Paying off debt could improve the likelihood of being approved for a mortgage loan in two ways: It lowers your debt-to-income ratio, an important factor that lenders consider, and it can help improve your credit score.
If you have a high amount of debt relative to your income, it can make getting approved for a mortgage more challenging. To receive a qualified mortgage, a borrower must typically have a debt-to-income ratio lower than 43%, according to the Consumer Finance Protection Bureau.1
Even if you meet the criteria for a mortgage, it’s still important to think carefully about the amount of debt you’d be taking on. It’s generally recommended that your mortgage payment take up no more than 30% of your total income. There are some exceptions, and KeyBank Mortgage Loan Officers are great resources and can help you navigate the homebuying process. They have information on home lending opportunities and programs to help you get started on the journey to homeownership.
About the KeyBank 2025 Financial Mobility Survey: This survey was conducted online by Schmidt Market Research in September 2024, polling 1,000 Americans, ages 18 – 70, with sole or shared responsibility for household financial decisions, who own a checking or savings account. The survey sought to gain insight into financial resiliency and explored respondents’ spending and savings habits, levels of financial confidence and financial resiliency, economic sentiment, and impacts of societal trends and pressures over the prior year.
This is designed to provide general information only. All credit products are subject to collateral and/or credit approval, terms, conditions, availability and subject to change. ©2025 KeyCorp. All rights reserved. CFMA #250404-3134828
NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. All home lending products, including mortgage, home equity loans and home equity lines of credit, are subject to credit and collateral approval. Not all home lending products are available in all states. Hazard insurance and, if applicable, flood insurance are required on collateral property. Actual rates, fees, and terms are based on those offered as of the date of application and are subject to change without notice.
NMLS #399797. Equal Housing Lender. Mortgage and Home Equity Lending products offered by KeyBank are not FDIC insured or guaranteed. KeyBank extends credit secured by residential real estate without regard to race, color, religion, national origin, sex, handicap, or familial status.
1https://themortgagereports.com/21985/high-debt-to-income-ratio-mortgage-approval
