If you have been thinking about buying a home, you probably have already started saving for the down payment. You might already have the down payment on hand, ready to buy a home when you find the right one. But what about actually getting the mortgage that you need to buy that home? Have you checked on your credit? Are you sure that your credit score is where it needs to be in order to get the loan that you want? Here’s what you need to do to make sure your credit score is ready for a mortgage application:
- Pay off your credit card debt. If you have been carrying around credit card debt, now is the time to start paying it off. This might mean that you need to cut back for an entire year, to reserve money to go specifically towards this debt. When looking at your credit report, lenders want to see that you have actively been working on paying down your debt, not just managing it. Choose one credit card and start working on paying it off. Once that one is paid off, start on the next one, until you no longer have any debt.
- Actually look at your report. You might think that because you have never been late on a bill you do not need to look at your report, but about a fifth of all people have an error on their report that is affecting their credit score. Luckily, there are lots of free tools that make it easy to get a look at your credit report, whether you just want to make sure everything is correct or whether you already suspect there might be an error that you want to work on having removed.
- Don’t apply for new credit cards. While having a large amount of credit available to you, especially if you are only using a little bit of that credit, can be good for your credit score and for getting a mortgage, don’t just apply for new credit cards and loans unless you actually need. You want your credit report to be as clean as possible when you apply for a mortgage.