Credit scores, along with your overall
income and debt, are a big factor in determining if you’ll qualify
for a loan and what loan terms you’ll be able to qualify for.
1. Check for and correct errors in your credit
report. Mistakes happen, and you could be paying for someone else’s
poor financial management.
2. Pay down credit card bills. If possible, pay off
the entire balance every month. However, transferring credit card
debt from one card to another could lower your score.
3. Don’t charge your credit cards to the maximum
limit.
4. Wait 12 months after credit difficulties to apply
for a mortgage. You’re penalized less for problems after a year.
5. Don’t purchase big-ticket items for your new home
on credit cards until after the loan is approved. The amounts will
add to your debt.
6. Don’t open new credit card accounts before
applying for a mortgage. Having too much available credit can lower
your score.
7. Shop for mortgage rates all at once. Too many
credit applications can lower your score, but multiple inquiries
from the same type of lender are counted as one inquiry if submitted
over a short period of time.
8. Avoid finance companies. Even if you pay the loan on time, the
interest is high and it will probably be considered a sign of poor
credit management.
