credit scoreSo you’ve saved up for the down payment on a new home, but have you taken a long, hard look at your credit score? Your credit score will determine the interest rate you will qualify for on your mortgage, primaryresidentialmortgage.com explains. It’s important you’re credit-aware.

An average credit score is good, but it’s not great. And with today’s market demands, you need great credit to qualify for a mortgage and buy your dream house. The good news is you can still do something about it.

Here’s how you can improve your credit, and get a better chance of getting approved:

Pay off your credit card debts

Let’s put it this way: if you’re drowning in credit card debt, lower your expectations. Both your debt-to-income and credit utilization ratio will be high, and that means your lenders will think twice before offering you a loan.

The solution: pay off your balances before submitting mortgage applications. Better yet, add a little extra to the minimum monthly payments. Other than lowering your debt load and boosting your credit score, it can also save you money on interest and show lenders you’re more than qualified.

Stop applying for new credit

A new house can also mean a new car and new furniture. But refrain from applying for auto loans and new credit cards until you’ve locked down your mortgage, or this can raise some red flags.

Shop with intent

It’s smart to shop around for the best rates, but keep the search focused and brief. Over time, your FICO score can start showing your applications as separate inquiries, which can hurt your credit score. It’ll even lower your chances if the lender is using an older version of the FICO score, which reads mortgage applications as separate inquiries when they’re not within two weeks of each other.

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Your credit score can sometimes make or break your chances of getting approved for the mortgage of your dreams. Take steps in improving it as early as now, so it’s easier to apply for a mortgage now and other credit lines down the road.