Getting Your Credit In Shape Before You Buy A House

When you're buying a house, the preparation you do ahead of time plays a major role in the end result of your home search. During this time, there are a few things more important than your credit score. An excellent credit score can ultimately help you save big on interest payments over the life of your mortgage. Start by understanding these steps to building great credit.

• Check Your Credit Score
  The first step is simply understanding where your credit currently stands, and it's easier than ever to do so. You are entitled to one free report from each of the three major credit bureaus each year, so you can check for free if you haven't done so already. Even if you know your report will be less-than-perfect, checking it is the only way to find out what you need to do to improve your score.
  
  
• Ask an Expert
  If you're not too familiar with reading credit reports or simply want to make sure you don't miss any details, speaking with a credit expert is a great way to get up to speed. If possible, choose a credit/financial expert you know and trust. If not, ask around for recommendations from others who have been in your position.
  
  
• Clear Up Debt
  Old, outstanding debts can do major damage to your credit score, so addressing those issues is one of the first steps in establishing good credit. Many creditors are willing to set up payment plans so that you can cover old debts over time rather than in one lump sum.
  
  
• Pay on Time, Every Time
  Cleaning up old credit issues can be a real hassle, and making payments on time helps ensure that no new issues will crop up. If possible, it's even a good idea to pay down your balance a little extra each month. In addition to helping avoid complications, using your credit and then making payments on time is one of the best ways to improve your credit score long-term.
  
  
• Set Up Automatic Bill-Pay
  Even small, local banks now typically offer online banking and automatic bill-pay, so why not take advantage? Doing so will save you time, help you avoid forgetting to pay on time, and keep your credit score moving in the right direction.
  
  
• Plan Ahead
  No matter what part of the home-buying process we're discussing, planning ahead is always one of the keys to success. The same goes for getting your credit in order because repairing past issues takes time. Even if your credit is currently in great shape, you'll want to plan ahead so that you know what sort of interest rates to expect from your mortgage, and make sure your credit score is as strong as possible.
  

No matter where you're starting from, it really is possible to clean up your credit before buying a house, and the payoff is more than worth the effort. The key is to make sure you understand how your credit score is calculated, where your score could use improvement, and the steps you need to take to achieve your credit goals. With the right credit plan in place, you'll be well on your way to achieving your home-buying goals, as well.

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