Getting Your Credit Ready to Buy a Home in Los Angeles

Buying a home in Los Angeles County, whether it's a condo in Koreatown, a starter home in the San Fernando Valley or a townhouse in Santa Clarita, is one of the biggest financial moves you'll make. Home prices here are high, so even a small difference in your mortgage rate can add up to a lot of money over the life of a loan. Your credit is one of the main things that affects that rate.

Here's how lenders look at your credit, what the basic score requirements are for common loan types, and a step-by-step plan to get your reports in shape before you apply.

Why your credit matters so much for a mortgage

The Consumer Financial Protection Bureau (CFPB) explains that your credit score affects both whether you qualify for a mortgage and the interest rate you're offered. In general, borrowers with higher scores qualify for lower rates. Lenders also look beyond the score at your full credit report: recent late payments, collections, how much of your available credit you're using, and how long you've had credit.

Your credit is only one part of the picture. Lenders also look at income, employment, debt-to-income ratio, savings and the down payment. But it's a part you can prepare in advance.

Credit score basics for common loan types

Requirements vary by lender and change over time, so always confirm with a loan officer. Here are some published starting points:

FHA loans: HUD's guidelines set a minimum decision credit score of 500. Borrowers with scores of 580 or higher can qualify for maximum financing (the standard 3.5% down payment). Borrowers from 500 to 579 are limited to 90% financing, which generally means at least 10% down. FHA loans are a popular option for first-time buyers, and the CFPB has a helpful FHA loan overview.

Conventional, VA and other loans: Score requirements are set by the loan program and the individual lender, and many lenders set their own minimums (sometimes called "overlays") above program minimums.

Lenders often pull a "tri-merge" report with scores from all three bureaus. HUD's guidelines describe using the middle of the three scores. If there are two borrowers, the lower borrower's score generally controls. So an error on just one bureau's report can still matter.

A step-by-step credit prep plan

6–12 months before you apply

1. Pull all three credit reports. According to the FTC, you can get free reports every week from Equifax, Experian and TransUnion at AnnualCreditReport.com. Read every account, not just the score.

2. Dispute genuine errors early. Look for accounts that aren't yours, late payments reported in error, duplicate collections, wrong balances, or negative items older than the reporting period. You can dispute inaccurate, incomplete, outdated or unverifiable information for free with the bureaus and the company that reported it. The CFPB says investigations generally take up to 30 days (sometimes 45), so start well before you need a pre-approval. See our step-by-step guide to disputing a collection.

3. Check for California-specific issues. California law (SB 1061, effective January 1, 2025) generally bars medical debt from appearing on consumer credit reports. If you see medical collections on your report, ask about them.

4. Lower your credit card balances. FICO says "amounts owed," including how much of your revolving credit you're using, is about 30% of a FICO Score. Paying balances down is one of the most effective legitimate steps you control.

5. Make every payment on time. Payment history is about 35% of a FICO Score. Set up autopay so nothing slips through during a busy home search.

3–6 months before you apply

6. Avoid new credit. New applications create hard inquiries and new accounts, both of which can affect your score. Hold off on new car loans, store cards and "buy now, pay later" financing until after closing.

7. Don't close old accounts without a reason. Length of credit history matters, and closing a card lowers your available credit, which can raise your utilization.

8. Talk to a lender early. A loan officer can tell you exactly where you stand for the programs you're interested in. If you correct an error late in the process, ask your lender about a rapid rescore. That's a service lenders can request from the bureaus after a verified correction. Consumers and credit repair companies can't order one directly.

9. Meet with a HUD-approved housing counselor. The CFPB recommends housing counselors, many of whom offer free or low-cost help with budgeting, credit and homebuyer education. Some down payment assistance programs require a homebuyer education course anyway.

Right before and during escrow

10. Keep everything steady. Don't change jobs if you can avoid it, don't move large sums without documentation, and don't open new credit. Lenders may re-check your credit before closing.

Down payment help in California and Los Angeles

High prices make down payment assistance especially valuable in LA. CalHFA (the California Housing Finance Agency) offers first-mortgage and down payment assistance programs for eligible buyers, and the City and County of Los Angeles have offered their own purchase-assistance programs. Each has its own credit score, income and education requirements, and funding comes and goes, so check current availability on the official program sites and ask your lender which programs they work with.

What credit prep can't do

It's important to be realistic. No one, including a credit repair company, can legally remove accurate late payments, collections or bankruptcies from your report before their reporting period ends. No one can guarantee you'll reach a particular score by a particular date, either. What you can do is make sure your reports are accurate, reduce balances, build on-time history, and give yourself enough time before you apply.

Common mistakes LA homebuyers make with credit

Waiting until after an offer is accepted to look at their credit

Paying for a "trade line" or "credit sweep" scheme that promises quick results

Financing furniture or a car right before closing

Disputing accurate accounts in bulk, which can complicate underwriting (lenders may ask for disputes to be resolved before closing)

Assuming one bureau's score is the one the lender will use

Get a pre-application credit review

Thinking about buying in Los Angeles, the San Fernando Valley, Santa Clarita or anywhere in the country? Book a free 15-minute consultation with Ortarias Credit over Google Meet. We'll go through your reports with you, flag anything that may be inaccurate, incomplete or outdated, and help you build a realistic plan to discuss with your lender.

Book your free consultation → · Call or text 818-850-0023

Results vary by individual. No specific score, approval or timeline is guaranteed. This article is general information, not legal, tax or mortgage advice. Talk to a licensed loan officer about your situation.