How to Improve Credit to Buy a House

When it comes to purchasing a home, you need to obtain a mortgage to pay for the house. A mortgage is handed out by a bank or other financial institution where it is determined exactly how much money you can obtain. The companies and banks also determine what kind of interest rate your loan is going to have. The better your credit score is, the better your interest rate is going to be. In order to obtain a better loan rate, you need to increase your credit.

Instructions

1

Contact your credit card companies and have your limit increased. The amount of money you have available on your card can increase your credit score. However, once you obtain the credit increase, you need to make sure you don't purchase more.

2

Inspect your credit report. You can obtain a free report at AnnualCreditReport.com. Here you can see if there are any small bills, such as cable or phone bills, that have gone unpaid. These can be hurting your credit score but are easily fixed. Contact the company after you pay the bill and ask them to remove the information from your credit score.

3

Pay your credit card bills before the billing statement due date. If you wait until after your statement date there is going to be some build-up on the card (from purchased you made in the new billing period) that don't go unpaid. These can bring down your credit score.

4

Pay your monthly bills, including your gas, water, heat and cable bills, on time. However, there are many companies that now report your late payments to your creditors. This can take a hit on your credit score. Make sure to pay these off as quickly as you can to avoid any of these penalties.