Tips on How to Improve Your Credit Score

Hey folks, it's time to get real about your credit score. If you're anything like me, you probably don't pay much attention to it until it's time to apply for a loan or credit card. But did you know that your credit score can make or break your ability to obtain a mortgage loan?

When you apply for a mortgage loan, lenders take a close look at your credit score and credit history. They want to know if you're a responsible borrower who will pay back the loan on time and in full. A good credit score can help you qualify for a mortgage loan with a lower interest rate and better terms, while a poor credit score can make it more difficult to get approved and result in higher interest rates and less favorable terms.

In short, your credit score is one of the most important factors that lenders consider when deciding whether to approve you for a mortgage loan. By taking steps to improve your credit score, you can increase your chances of getting approved for a loan with better terms and save yourself thousands of dollars in the process.

1. Check your credit report regularly

This is a no-brainer, but it's worth repeating. Make sure to check your credit report for any errors or fraudulent activity. You can get a free credit report from each of the three major credit bureaus every year, so take advantage of it.

2. Pay your bills on time

This one seems obvious, but it's worth emphasizing. Late payments can have a big impact on your credit score, so set up automatic payments or reminders to make sure you're always on time.

3. Lower your credit utilization ratio

Your credit utilization ratio is the amount of credit you're using compared to your credit limit. Aim to keep your utilization ratio under 30% to improve your score.

1. Check your credit report regularly

2. Pay your bills

on time

This one seems obvious, but it's worth emphasizing. Late payments can have a big impact on your credit score, so set up automatic payments or reminders to make sure you're always on time.

3. Lower your credit utilization ratio

Your credit utilization ratio is the amount of credit you're using compared to your credit limit. Aim to keep your utilization ratio under 30% to improve your score.

4. Increase your credit limit

If you're struggling to keep your credit utilization ratio low, consider asking for a credit limit increase. Just make sure not to use the extra credit as an excuse to spend more.

5. Diversify your credit

Having a mix of credit types (like a credit card, auto loan, and mortgage) can improve your credit score. But don't open new accounts just to add diversity - only take on credit that you actually need and can handle responsibly.

4. Increase your

credit limit

If you're struggling to keep your credit utilization ratio low, consider asking for a credit limit increase. Just make sure not to use the extra credit as an excuse to spend more.

5. Diversify your credit

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📉 Mortgage Pre-Approval Denied? The Hidden Reasons Loans Collapse Before Closing 🔍

🏦 Why Mortgage Pre-Approvals Fall Apart (And How to Protect Your Home Purchase) 🚨

Bill Rapp, Commercial Mortgage Broker

February 24, 2026•3 min read

🏦 Why Mortgage Pre-Approvals Fall Apart (And How to Protect Your Home Purchase) 🚨

📉 Mortgage Pre-Approval Denied? The Hidden Reasons Loans Collapse Before Closing 🔍

Why Pre-Approvals Fall Apart

A mortgage pre-approval is not a guarantee.

It’s a conditional financial snapshot — and if that snapshot changes, the loan can fall apart fast.

As a mortgage broker at Medallion Funds, I’ve seen strong buyers lose homes days before closing because something changed between pre-approval and underwriting.

If you're buying in Texas — especially competitive markets like Houston, Katy, Fulshear, or Dallas — understanding why pre-approvals fail could protect your deal.

Let’s break it down.

What a Mortgage Pre-Approval Really Means

A mortgage pre-approval is based on:

·Credit report

·Income documentation

·Asset verification

·Debt-to-income ratio (DTI)

·Preliminary underwriting guidelines

It is not the final underwriting decision.

Final approval happens after:

·Full underwriting review

·Appraisal

·Title work

·Employment verification

·Updated credit pull

That’s where deals often fall apart.

The 7 Most Common Reasons Pre-Approvals Collapse

1️⃣ Income Changes

·Job switch

·Commission drop

·Overtime reduced

·Self-employed income volatility

Underwriters require stable, verifiable income. A new job or compensation structure can trigger requalification.

2️⃣ New Debt Before Closing

Buying a car.
Opening a credit card.
Financing furniture.

Even small new debt can push your debt-to-income ratio over program limits.

This is one of the most common mortgage approval mistakes.

3️⃣ Credit Score Drops

Missed payment
Higher credit utilization
Co-signed loan reported

A 20–30 point drop can:

·Increase your rate

·Change your loan program

·Kill approval entirely

Lenders run a final credit check before closing.

4️⃣ Appraisal Issues

If the appraisal comes in low:

·Loan-to-value (LTV) increases

·Buyer must bring more cash

·Seller must reduce price

·Deal dies

Pre-approval does not protect against appraisal risk.

5️⃣ Asset Verification Problems

Large undocumented deposits
Gift funds not sourced properly
Insufficient reserves

Underwriters must paper-trail every dollar.

6️⃣ Self-Employed Documentation Gaps

For business owners and 1099 earners:

·Tax returns matter more than revenue

·Write-offs reduce qualifying income

·Year-over-year declines can disqualify

Pre-qualification without reviewing full returns is dangerous.

7️⃣ Rate Lock & Market Volatility

If rates spike before you lock:

·Payment increases

·DTI increases

·You may no longer qualify

In volatile markets, structure matters.

Why Big Bank Pre-Approvals Fail More Often

Many retail banks issue automated approvals without:

·Deep income review

·Full asset documentation

·Exit strategy discussion

·Program flexibility

As a broker, we:

·Run files through multiple lenders

·Stress test DTI

·Review tax returns upfront

·Identify risk early

That’s how you protect closings.

Texas-Specific Risk Factors

In Texas markets like Houston and Katy:

·Property taxes are high

·Insurance premiums fluctuate

·HOA dues can impact DTI

·Flood zone designations affect approval

All of these variables must be accounted for at pre-approval.

If they aren’t, the deal can collapse during underwriting.

How to Make Sure Your Pre-Approval Doesn’t Fall Apart

Here’s the discipline checklist:

✅ Do not open new credit
✅ Do not change jobs without consulting your lender
✅ Keep credit utilization low
✅ Don’t move large sums of money
✅ Lock your rate strategically
✅ Use a broker who underwrites upfront

Pre-approval should be a risk management process — not a sales document.

Final Take

Most pre-approvals fall apart because they weren’t structured properly from day one.

If you're buying in Texas in 2026, you need more than a pre-approval letter.

You need:

·Real underwriting analysis

·Exit flexibility

·Conservative qualification

·Strategic rate lock timing

If you want a pre-approval that actually closes, that’s what we build at Medallion Funds.

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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2021 | Medallion Funds

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Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014

Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/

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Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014 https://medallionfunds.com/bill-rapp/

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281-222-0433

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Tips on How to Improve Your Credit Score

1. Check your credit report regularly

2. Pay your bills on time

3. Lower your credit utilization ratio

1. Check your credit report regularly

2. Pay your bills

on time

3. Lower your credit utilization ratio

4. Increase your credit limit

5. Diversify your credit

4. Increase your

credit limit

5. Diversify your credit

Blogs

The Top 5 Mortgage Mistakes to Avoid

Mortgage Do and

Do not list