Before buying a house, it is good to have a good credit score. This will help with interest rates and what the bank is willing to give you. Your credit score consists of different things. These things include income, how long you have been at your job, your payment history, amounts owed, new credit, the length of your credit history, and your credit mix (credit cards, accounts, and loans). Based on all these factors your credit score is determined.

Here are some ways to improve your credit score before applying for that home loan so you can have a good credit score again. You will have to start these steps some months before you plan to apply as it takes time to improve a credit score.

1.  Keep balances low – keep your debt low. Try to keep the balances on your credit cards below 50%.

2.  Fix your mistakes – fix errors on your credit reports. Request a copy of your credit reports and look for any mistakes. Get them fixed.

3.  Pay your debt – pay off what you owe. Costs for transferring money from card to card build up. Rather just pay it off.

4.  Pay more – make payments that are more than your minimum. This looks good on your record and you will save money on interest.

5.  Plan ahead – the process of increasing your credit score takes time. Start the process well ahead of the time you plan on applying for a loan. Get your debt paid off and make sure your spending behavior is spotless. Only when everything is in place should you apply for a home loan.

6.  Don’t buy a car – it is a bad idea to buy a car in the few months before applying for a home loan. Rather leave it for the future.

7.  Pay bills on time – this may seem simple, but it is important. Keep paying your bills on time. Missing payments hurts your credit score.

There you have it. Start planning and taking action to improve your credit score. This will place you in a much better position when you apply for a home loan.