If you’ve ever Googled “credit score tips” or asked a friend how to qualify for a mortgage, you’ve probably encountered some conflicting advice.
And we get it—credit can feel complex. But when it comes to applying for a home loan, misunderstanding how credit works could lead to avoidable roadblocks in the approval process.
Let’s walk through some of the most common credit myths that tend to cause confusion—and clarify what lenders may actually consider when reviewing your mortgage application.
Myth #1: “I need perfect credit to get a home loan.”
A high credit score can help with eligibility and loan terms, but many loan programs are designed to serve a broad range of credit profiles.
For example:
- Some conventional loans may be available to borrowers with scores starting around 620
- FHA loans may allow for credit scores as low as 580, depending on additional qualifying factors
Every application is reviewed as a whole, so credit score is only one part of the bigger picture.
Myth #2: “Checking my credit will lower my score.”
When you check your own credit (through a credit monitoring service or online tool), it’s considered a soft inquiry—and has no impact on your score.
Lenders, on the other hand, perform hard inquiries during the pre-approval or application process. These may cause a minor and temporary dip, but generally not enough to affect eligibility.
Myth #3: “Paying off a collection will immediately raise my score.”
Paying off collections may be a positive step toward financial health, but it doesn’t guarantee an immediate credit score increase.
Some scoring models still factor in paid collections, while others weigh them differently. Either way, building strong credit habits—like paying on time and keeping balances low—can have a more consistent long-term impact.
Myth #4: “Closing old credit cards improves your score.”
Closing a long-standing account can reduce your average credit age and decrease your available credit—both of which may affect your score.
Unless the account has an annual fee or other concerns, it may be more beneficial to keep it open and active with minimal use.
Myth #5: “I earn a good income, so credit isn’t that important.”
Income helps demonstrate your ability to repay, but credit shows how you’ve historically managed debt. Lenders typically consider both when reviewing a mortgage application.
Think of it this way: income tells one part of your financial story—credit helps tell the rest.
Moving Forward With Confidence
No credit profile is perfect—and that’s okay. What matters is how your overall financial picture aligns with the loan program you’re applying for. Understanding what lenders actually review can help you prepare more confidently.
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