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.
Check
for and correct errors in your credit report. Mistakes happen, and you could be
paying for someone else's poor financial management.
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.
Don't
charge your credit cards to the maximum limit.
Wait
12 months after credit difficulties to apply for a mortgage. You're penalized
less for problems after a year.
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.
Don't
open new credit card accounts before applying for a mortgage. Having too much
available credit can lower your score.
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.
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.
