This will let you know where you stand, and you can simulate different things to see how it will affect your score.
Besides the obvious of making your payments on time, make sure your debt utilization is below 20%!
You want a decent amount of credit. If you only have one Credit Card, you don't have a lot of credit available to you. The sweet spot seems to be around 4 cards! Try to keep your cards, even if you don't use them, keep them open. You want to show that you hang on to your accounts (closing out accounts often can actually hurt you). Also, ask all your existing credit card companies to increase your credit limit. The higher your limit, the better your score b/c they assume the CC company has evaluated you favorably to extend your credit. Also having a good mix of credit helps, like Student Loans/Car Loans etc, but you don't want to make any large purchases just before buying a home!
I have lots of other great advice that I share with my clients, consider choosing a REALTOR who can help you get these answers!
Pay off any outstanding debts, and pay down credit cards...it's not magic...it's just the diligent work of paying things off!
A key indicator of your creditworthiness is your capacity to handle a certain level of debt. Lenders will review your current debt payments-to-income ratio. Based upon this, they will determine how much credit they will extend and at what interest rate. Lenders will be more reluctant to lend to individuals who are near the top of the acceptable range of 20 percent.
Use the debt payments-to-income ratio formula: Monthly debt payments/Monthly net income.
You've received some good answers. I have some great credit information I've put together for my buyers. It explains your credit score and what goes into it, how to improve it, and how to dispute any mistakes along with a sample dispute letter. There's information on the expiration of different types of credit issues.
When you do start the loan pre-approval process, you'll want to contact all the lenders within a 30-day period, or you'll start getting dinged for each inquiry. The information I have explains this.
Let me know if you'd like me to send that to you, just call or email me off forum.
This is the same stuff you pay one if those credit clean up companies to do...except you do it yourself.
I saw I believe your other post about home buying, but you already had a sufficient number of responses for me to post an answer.
Since I don't have access to your report, I can only answer in generalities.
First, your credit score begins to get lower on your revolving credit cards once you Pass 1/3 of your limit. If you are very near your limits, the bureaus will deduct even more points from your scores.
Next, if you have any late payments, collections, charge-offs, or Bankruptcy these will certainly affect your score as well.
Inquiries against your credit also lower your score. Usually about 10 points for each inquiry.
Exception: If you are shopping for a mortgage, and more than one lender pulls your credit, it is Only counted against you once as long as the credit pull is done in a 30 day time frame.
Lastly, if there is anything on your credit that is incorrect, you should address this immediately in writing. The downside however is that it usually takes at least up to 60 days to correct. Once you have chosen a lender, he or she can also help you in this last area. If you can obtain letters from the creditors in cases where there was an error reported on your account, your lender can do what they call a Rapid Rescore. This can be accomplished in a week or so. Additionally, if you are able to pay down any credit cards that are over 1/3 of your limits, with written proof of your current balance from your lender on their letterhead, your lender can also submit this under Rapid Rescore and improve your credit as well.
Hope this helps.
If you need any assistance, or would like a free consultation regarding a new loan, please contact me through my profile with my contact information.
Best of Luck.
Wayne L. Brown
Security National Mortgage Company
NMLS # 343946
Company NMLS # 3116
I dont charge for credit repair, but do a lot of credit repair for my clients to get them better rates/terms, etc when applicable. I also have a system where we can basically say "IF we were to do THIS, what would be the outcome", OR, we could say "We need 50 points. What do we have to do to get 50 points" and it will tell you exactly what you could do to increase your score.
If you want, drop me a line and I can take care of you.