A great credit score is the key to obtaining a mortgage with a great interest rate. A low credit score is one of the fastest things to kill your chance of getting a house. So what do you do when you want to buy a house, but you have bad credit? These 6 tips will help you start turning around your credit score by helping you make the necessary changes.
  1. Pay on time

Your mortgage lender is going to be looking at your credit report to make sure you are a safe risk. They want to see that you are making your payments on time every month. Then you make your payment, try to pay even a little bit extra to go towards the principal as well.
  1. Improve your debt-to-income ratio

Lenders are also going to want to see what your debt-to-income ratio looks like. They want to see how much debt you have each month compared to how much money you are making. Start working your ratio down a little bit at a time in order to make a big improvement.
  1. Have available credit

Lenders like to see that you have credit that you are not using. That means you need to get to work on paying down on your credit cards, but don’t close your cards once you do that. Keep them open with zero-dollar balances. You want to show that you have a low ratio of the amount of credit you have available to the amount that you are actually using
  1. Catch up

If you are behind on any payments, your first step is to get current on all accounts. Your credit report will still show that you were behind on your payments in the past. This means it is going to take time to make the change, but you need to start the process. Once you are caught up, do everything you can to continue making your payments on time. Do not fall behind again.
  1. Look for errors

Unfortunately, it is not uncommon to find errors on your credit report. It’s your job to look over your report to see if there is anything showing on there that is in error. It can take some time to get these errors corrected, so you want to get started before you are ready to apply for a mortgage.
  1. Stop getting new cards

When you know you are interested in applying for a mortgage, you need to stop opening new cards. If you run out and start opening multiple accounts, you are going to make lenders nervous to lend you money as well. Just a small difference on your mortgage’s interest rate can make a big difference to the amount of money that you spend over the life of your loan. Every small increase to your credit score will help you not only secure a mortgage, but a good rate. It is never too early to start making these changes and it is never too late to make a change either.