Your Road to Better Credit and Qualifying for a Mortgage

You're ready to buy your first home.

Before you do anything else, you're going to want to get a handle on your credit score. That number will determine what kinds of loans you're eligible for what kind of rates you'll get.

While most lenders like to see higher credit scores, if you're a veteran applying for a VA Loan your magic number is a 620 FICO score. 

Keeping track of your score can alert you to any potential problems with your accounts. Even small changes like a $20 late fee on a bill can influence your credit score. So, it's always good to keep track. 

Get your free credit report

How can you keep track of your score?

There are lots of credit card companies that offer free FICO credit score insights to their customers. If your card company offers that benefit, you'll typically be able to access your score on their mobile app or online, which will give you a real-time estimate of what your number is.

Thanks to the Fair Credit Reporting Act, you also have access to your credit reports from all three major consumer credit reporting companies—Equifax, Experian and Transunion at

Keep in mind these three bureaus use different reporting models than FICO does, but they'll be useful for giving you a picture of what your credit looks like. 

Once you're there, you should expect to fill out personal information like your address, birthday, name, and social security number.

After that the site will take you through to each of your free credit reports. Since you’re technically leaving the site each time, it’ll ask you to verify information to make sure it’s really you and you didn’t just walk away from a public computer.

Don’t get freaked out if it asks you about accounts—like a mortgage—that you don’t have. That’s part of the process. Once you get to your report you’ll be able to verify that type of account isn’t open in your name.

What you’ll see once you’re there

The reports all look a little different. But there are a couple of things you’ll find on all three of the reports.

  • All your loans and credit cards and when they were opened
  • Whether they’re open or closed, in good standing or outstanding
  • A monthly breakdown of your payments
  • A link to dispute any inaccurate information
  • If your information has been used to deny your application for credit, insurance or employment.

You can get additional free reports if...

  • Someone has taken adverse action against you because of your credit report
  • You’re the victim of identity theft and a fraud alert has been placed in your file
  • Your file contains inaccurate information as the result of fraud
  • You’re on public assistance
  • You’re unemployed but want to apply for employment within 60 days

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But, wait! This report isn't right!

You were expecting to see an excellent credit score when you got your reports. But there's your number glaring back at you in black and white—and it doesn't look pretty.

Then you see it. A big, stinking mistake on your credit report. No. You don't owe $20,000 in student loans. You graduated debt-free. So, what gives?

It's possible your information got mixed up with someone else's in the report or that someone fraudulently opened an account in your name. The good news is you have the right to dispute anything on your report that you think is an error. Here's how. 

Contact the credit bureau

Take a deep breath and start your dispute process. The different credit bureaus have slightly different processes for how they receive disputes.

In general, you'll need to write a letter explaining which portions of the report you want to dispute. Don't forget to include copies of any documents that can support your dispute.

You can also include a letter that outlines exactly what you're disputing. That's a great option if you're filling out a dispute online because it helps provide a more in-depth explanation that might not be captured in the online form. 

  • Equifax—only accepts online disputes
  • Experian—only accepts online disputes
  • Transunion—accepts both online and mailed disputes

Remember, the three major credit bureaus are separate agencies. So, if there's a mistake on all three reports, you'll have to notify all three agencies. It's possible the error is only on one report, but you should be extra vigilant after finding the error to make sure it doesn't show up on yours.

Tell your creditor 

Let your creditor (credit card company, lender, etc.) know that you're disputing a claim on your credit report.

Remember to be polite and include copies of all the supporting documents you're sending to the credit bureau. Telling your creditor that you're disputing the claim doesn't mean they have to stop reporting it to the credit bureau. But it does mean next time they report it, they need to include all the information you gave them about the dispute.

Once your dispute is verified, your creditor has to tell the bureau to delete the error.

Follow up

Make sure you ask the credit bureau to keep you updated on how your dispute is progressing. If they remove the claim, you're eligible for another free credit report—even if it's been less than 12 months since your last one.

If they don't remove the claim, you can request that your dispute and all your supporting documents go to anyone who requests your credit report in the future. You'll end up paying for that service, but if it means you can qualify for your VA loan, it might be worth it. 

Ready to raise that score?

A quick search of the internet will yield all kinds of advice about raising your credit score. 

Some of the advice is sound—“pay your bills on time”—some of it more than a little sketchy—“take out a bunch of credit cards in your name, and use them all regularly, making only slightly more than the minimum payment each month.”

Please don’t do that. Not only will it not help your credit, it'll probably lead to a great deal of stress for you. 

The surprising way to raise your credit is simple: behave in a way that makes lenders feel comfortable.

Pay your bills, get a regular paycheck (or regular income, for you freelancers), don’t overextend yourself, and look to the future with every financial decision you make, saving when you can and living within your means.

Lenders want the same thing for you that you want for yourself. They want you to be comfortable with your finances, and able to pay your bills on time, with some money left to do the things you love.

It probably is a good idea to establish your ability to pay bills with a rental history and a credit card that you use regularly (and pay off just as regularly). If your employer offers direct deposit, you should take advantage; any lender would love to see regular cash flow in your account.

There are companies out there that can help counsel you on how to improve your credit, but be sure to vet each one carefully to make sure it's reputable since there are a lot of scams out there. Try looking for a program that's free and attached to a reputable lender, like Veterans United's Lighthouse program.

In the end, there are no secrets to improving your FICO score. The best way to get your score to a higher level is to show that you’re a good credit risk by paying your bills and living within your means. It may not be a non-stop party, but it’ll help you sleep well at night, and it’ll help you qualify for that loan when you need it.