Credit is one of the most important parts of your home loan application. When applying for a mortgage, every lender working with you on buying a home will pull your credit. If your credit is not great, there are a few steps you can take to start improving it, with home ownership as your end goal.

One of the best ways to boost your credit score is to keep up with the payments on your current bills. These include utilities, loan payments, and credit cards. If you have trouble remembering to pay them, most banks will help you set up an autopay or autodraft to get them paid on time.

The best thing you can do for your credit is to pay off your balance entirely each month. This shows potential lenders that you don’t buy more than you can afford and are good at managing your credit. If you are working to pay off existing debt, make this a top priority.

You can obtain a free credit report from the top credit reporting agencies annually to make sure that everything on your report is accurate. If not, you can dispute things that are inaccurate or not updated. Beware of companies that offer to “fix” your credit report by getting legitimate things taken off of the report. You cannot remove items from your report unless they are inaccurate.

When applying for a new loan (home, car, etc.), most lenders will do a hard pull of your credit. These inquiries can actually lower your credit score, especially if you get your credit pulled often. The exception to this is when you have similar pulls within a few days. Lenders recognize that you are likely shopping around for the best rates for a single new loan.

Improving your credit can take time, so don’t lose sight of your ultimate goal: home ownership.

Getting ready to purchase a home is a big step. Make sure that your credit is in tip-top shape to make the process smoother and enjoyable.

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