How to Fix Your Credit to Buy a House

Maintaining a good credit history is important, especially if you plan to buy a home. Individuals with good credit can easily qualify for a mortgage loan, and they'll likely pay a lower interest rate. On the other hand, bad credit can result in a loan denial. But fortunately, bad credit isn't permanent. There are tricks to fix your credit score, which will help you qualify for a mortgage loan in the future.

Instructions

1

Get a copy of your credit report. Visit www.annualcreditreport.com and request a free copy of your credit report. Review the report and look for inaccurate information that could reduce your credit score. If errors are present, contact the creditor and dispute the remark.

2

Pay your creditors. Submit your monthly payments before or on the due date to avoid late fees and negative remarks on your credit report. Late payments reduce your credit score, and they make it difficult for you to obtain financing.

3

Reduce your debts. Maxed-out credit cards or a high debt-to-income ratio can lower your credit score. If you're planning to buy a home, make plans to pay off or pay down your debts. Use cash instead of credit, and double or triple your minimum monthly payments to get rid of debt.

4

Settle collection accounts. Paying a collection or judgment account doesn't always remove the remark from your credit report. Contact the reporting creditor and establish a payment arrangement. In return, ask the creditor to remove the negative remark upon receipt of full payment. The creditor may comply with your request.

5

Open a new credit account. If you've closed your credit accounts, apply for a new one. Get a secured credit card from your bank or another financial institution.