Preparing to buy

If you're thinking of buying home soon, you should make sure that your credit looks good. Right now credit companies are reducing credit limits on some customers, and that could have an affect on your credit score. That's because when your total available credit shrinks, the percentage of of credit being used goes up, and that can affect your credit score in a negative way. And having a good credit score is essential to getting a good loan.

So here are a few things you can do right now to clean up your credit, so that you can be confident when it's time to buy your home.

• check your credit report. It's essential to know what on your credit report, so that you can clean up any negatives. you are entitles to one free credit report per year. take advantage of that and see what's on your report.
• don't get close to maxing out your cards, because 30% of your FICO score (your credit score) is based on the ratio on the mount owed to your available credit.
• Keep accounts active. don't close them out. it looks good when you have a lot of available credit.
• this is the biggest one: pay your bills on time. this makes a huge difference to a bank looking to give you a loan for a home.
• Don't apply for new cards. especially at retail stores. keep the balance on the ones you have low, and you should be fine.

So there you have some tips on cleaning up your credit. That way you can go into buying a home with confidence.