Credit Score & Mortgage Readiness

Mortgage readiness isn’t just about credit repair—it’s about building financial confidence lenders can trust.

• Step 1: Review Your Credit Reports → Start by reviewing your credit reports, then focus on reducing your balances to improve utilization. Get free copies from AnnualCreditReport.com and dispute any errors promptly.
• Step 2: Reduce Credit Utilization → Keep balances below 30% of available limits to see fast score improvements.
• Step 3: Avoid New Accounts → Hold off on new credit until after closing to avoid temporary score drops.
• Step 4: Build Positive Payment History → Set up auto-pay and show consistent on-time payments.

Once your credit habits are on track, Budgeting & Affordability helps you align your financial habits with a realistic and sustainable homebuying budget.

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Your credit score is just one piece of your financial puzzle.

True mortgage readiness also means:

• Stable Income: Usually two years of consistent, verifiable earnings.**
• Low Debt-to-Income Ratio (DTI): Ideally under 43%.**
• Savings for Down Payment & Closing Costs: Even with assistance, having reserves shows stability.

**Common underwriting standard. Varies by program and borrower profile.

Preparation turns approval into confidence.

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In Indiana, many first-time buyers use programs through the Indiana Housing & Community Development Authority (IHCDA) such as Next Home or First Place. Many IHCDA programs list minimum credit score requirements around 640, but individual lenders may have additional criteria depending on the borrower’s full financial profile.

Nationally, first-time buyers on the LendingTree platform averaged a credit score of 700 in 2024 (Davis, 2025).

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Across Indiana, first-time homebuyers often start from the same place—balancing steady income, modest savings, and the uncertainty of whether their credit is “good enough.”

The encouraging truth is that many succeed not because they began with perfect credit, but because they took small, consistent steps that improved their financial picture over time. Paying down revolving balances, reviewing credit reports for accuracy, and setting up automatic payments can quickly shift a credit profile from borderline to mortgage-ready.

National data reflects this trend: LendingTree found that first-time buyers averaged a 700 credit score in 2024, compared with 732 for repeat buyers (Davis, 2025). This demonstrates that strong but realistic preparation makes homeownership attainable. Each improvement—no matter how small—builds momentum and confidence, proving readiness is earned, not given.

Once your credit picture is stable, the next step is building a homebuying budget that reflects both your financial comfort and long-term goals.

Visit our Homebuyer Blueprint—to see how these steps fit into the full roadmap to ownership.

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You don’t need to navigate mortgage readiness alone. An experienced team can analyze your credit, offer actionable insights, and create a step-by-step plan to get you home-ready faster.

Anne King (NMLS #253976) and her team with Amres Corporation can help you review your credit profile, explain what lenders look for, and outline steps that may improve your readiness over time. Whether you’re starting from 580 or 750, we’ll help you see where you stand—and what’s next.

To learn how each professional supports your journey, continue to Working With the Right Team.

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This visual shows the step-by-step journey every first-time homebuyer takes to become mortgage-ready.

Each stage builds upon the last—starting with understanding your credit and ending with the confidence of a full mortgage approval.

Here’s what it means:

• Check Your Credit: Know where you stand and address any errors early.
• Build Consistency: Make on-time payments and reduce revolving balances.
• Strengthen Your Profile: Avoid new debt and maintain steady income.
• Set Mortgage Goals: Determine your target price range and loan type.
• Mortgage-Ready Confidence: Reach the point where your finances support your homeownership goals.

Every homebuying journey begins with awareness—and ends with confidence. Stay consistent, and every small step moves you closer to your first set of keys.

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Your credit score isn’t a label—it’s one part of a bigger financial picture that helps you move confidently toward homeownership. With the right guidance and preparation, you can transform it into a foundation for lasting financial freedom.

Continue your journey with our Budgeting & Affordability Guide—learn how to set a smart home-buying budget and turn your readiness into results.

Or revisit the Homebuyer Blueprint to see where you are in the full roadmap to homeownership.

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Your confidence grows with every step you take. As you continue through the Blueprint, each topic builds on the last to help you make informed, financially sound decisions.

Continue Learning:
→ Next Topic: 📊 Budgeting & Affordability
→ Return to the First-Time Homebuyer Blueprint 

Each guide builds on the last, helping you make informed decisions that support long-term stability and wealth through homeownership.

Continue learning with these other related topics:

🏁 Understanding the Mortgage Process

Learn how lenders review your application and what to expect from pre-approval to closing.

💰 Down Payment Basics

Understand how much you really need—and how grants or assistance can help.

📈 Credit Score & Mortgage Readiness (You’re Here)

Build financial confidence and strengthen your credit profile before you buy.

📊 Budgeting & Affordability

Create a plan that aligns with your lifestyle and long-term goals.

🏠 First-Time Buyer Programs & Grants

Find programs that can reduce your upfront costs or make homeownership possible sooner.

📋 Loan Program Options

Compare FHA, Conventional, USDA, and VA loans to find your best fit.

🔑 Closing Costs & What to Expect

Prepare for the final stretch—understand what fees to expect and how to save.

👥 Working With the Right Team

Learn how to choose your lender, agent, and homebuying partners wisely.

📍 Home Search & Neighborhood Selection

Discover how to find homes and communities that fit your goals.

🚚 Moving From Renter to Owner

Transition smoothly from renting to owning your first home.

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Davis, M. (2025, March 3). 3 in 5 mortgage offers on LendingTree platform go to first-time buyers. LendingTree. https://www.lendingtree.com/home/mortgage/first-time-homebuyers-study/ 

Experian. (2024, October 23). How credit scores for mortgage borrowers have changed. https://www.experian.com/blogs/ask-experian/how-credit-scores-for-mortgage-borrowers-changed/ 

Indiana Housing and Community Development Authority. (2024, August). STEPS lender matrix [PDF]. https://www.in.gov/ihcda/files/STEPS-Lender-Matrix-August-2024.pdf 

LendingTree. (2024, October 10). Average credit scores for first-time homebuyers in 2024. https://www.lendingtree.com/home/mortgage/first-time-homebuyers-study/ 

Pinto, E. (2024, June 18). First-time homebuyers: From 2023 challenges to 2024 realities. HousingWire. https://www.housingwire.com/articles/first-time-homebuyers-from-2023-challenges-to-2024-realities/ 

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