woman with credit card on computer

Follow these steps to strengthen and solidify your credit score — one of the first things you should do to prep for buying a home.


Building good credit is a crucial part of buying a home, so be sure your score is good before you start your home search.

The process of buying a home starts long before you walk through the door of your first open house. One of the first steps is organizing your finances — and understanding your credit is a critical component.

Good credit opens lots of doors when it comes to buying a home, whereas bad credit can close them. And considering that the new Qualified Mortgage Rules have upped the scrutiny of mortgage applications and made qualifying for a loan much more challenging, having good credit has become an even more crucial factor in owning a house.

Wondering how to fix your credit? Whether you’re in need of an overhaul or you’re just looking to preserve your stellar credit record, follow these nine steps to strengthen and solidify your score.

1. Get your hands on your credit report

If you don’t have a current report on hand, get one now. You need to be aware that problems exist before you can solve them — and serious issues, and sometimes even minor ones, can take months to repair. There are a variety of ways to get your report, and you’re entitled to a free credit report from each of the three credit bureaus once a year under the FACT Act.

2. Mistakes happen: Get them fixed

Every year, a whopping 25% of the people who are declined for a mortgage have errors and inaccuracies in their credit reports. When you spot them, it’s up to you to fix them.

You can find step-by-step guides on how to file a claim on any of the credit bureau websites; your report itself will also have instructions. Follow them and keep a good record of your dispute, including copies of any documents you file with the bureaus. Once you make an initial claim, you should get a response within 60 days.

3. Stay current

In other words, pay your bills on time. It sounds like a no-brainer, but if you’re looking to increase those scores over time in a clear and steady upward climb, never miss a payment. Ever!

4. Pay more than the bottom line

Another credit-building tip is to always make more than the minimum payments on your revolving credits each month. A history of minimum-only payments is not a positive indicator for anyone reviewing your credit report.

Always pay more, even if it’s just a little bit. Not only will you chip away at your balances faster, you also will save money on the total amount of interest handed over to your bank.

5. Maintain low balances

Some say the best way to keep your score high is to avoid carrying a balance that’s more than 50% of your limit on each card, so pay those debts down below that halfway mark as soon as possible.

6. Don’t move it, lose it

Pay off the debt on your existing card, don’t just move it to a new one. The credit card companies have caught on to consumers who try to reduce balances by shifting them back and forth between cards, and while they’ll let you do it, they’ll charge you hefty fees when you do. The benefit is just not worth the extra cost. You’ll pay off debt quicker (and you’ll have less of it) if you just work hard to pay off what’s on the card you already have.

7. Don’t cut cards

There’s a lot of controversy regarding whether you should close paid-off accounts, but generally it’s smarter to play it safe: Pay off all your credit cards, but don’t close any of them prior to applying for a mortgage.

8. Keep your old car

It’s best to avoid any big changes to your finances right before a home purchase. That means no big purchases on credit, like buying a car or charging an expensive vacation. Any significant buys can alter your financial picture, and banks don’t like to see sudden changes just before approving a loan.

If you think you can get your credit spruced up and ready to go in a matter of days, think again. Even without any dings on your report, you’ll want to make sure all your credit cards are paid up prior to qualifying for a loan, and that requires planning. Pay down your debt, then try to lock up your credit cards until your credit score has been checked and you have been approved for your mortgage.

What tips do you find helpful when working to boost your credit score? Share in the comments below!