Credit scores play a big role in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:
Check for errors in your credit report:
Thanks to an act of Congress, you can download one free credit report each year at annualcreditreport.com. If you find any errors, correct them immediately.
Pay down credit card bills:
If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.
Don’t charge your credit cards to the max:
Pay down as much as you can every month.
Wait 12 months after credit difficulties to apply for a mortgage:
You’re penalized less severely for problems after a year.
Don’t order items for your new home on credit:
Wait until after your home loan is approved to charge appliances and furniture, as that will add to your debt.
Don’t open new credit card accounts:
If you’re applying for a mortgage, having too much available credit can lower your score.
Shop for mortgage rates all at once:
Having too many credit applications can lower your score. However, multiple inquiries about your credit score from the same type of lender are counted as one if submitted over a short period of time.
Avoid finance companies:
Even if you pay off their loan on time, the interest is high and it may be considered a sign of poor credit management.