 TITLE: What Credit Score Do I Need to Buy a House? CONTENT: How to Prepare Your Credit for a Mortgage\n-----------------------------------------\nIf you're thinking about buying a home soon, it may be worth spending some time getting your credit ready before you officially begin the process. Here are actions you can start taking now, some of which can improve your credit score relatively quickly.\n### Check Your Credit Score and Reports\nKnowing where you stand is the first step to preparing your credit for a mortgage loan. You can check your credit score with Experian for free, and if it's already in the 700s or higher, you may not need to make many changes before you apply for a preapproval.\nBut if your credit score is low enough that you risk getting approved with unfavorable terms or denied altogether, you'll be better off waiting until you can make some improvements.\nWhether or not your credit is ready for a mortgage, get a copy of your credit reports to check for potential problems or concerns. You can get a free copy of your credit report every 30 days from Experian or from each of the three national credit reporting agencies every 12 months at AnnualCreditReport.com.\nOnce you have your reports, read through them and watch for items you don't recognize or are outright inaccurate or fraudulent. If you find any inaccuracies, you can dispute them with the credit reporting agencies. This process can take time, but it can also improve your score quickly if it results in a negative item being removed.\n### Pay Down Debt\nPaying off other debts can not only lower your debt-to-income ratio, but it can also help improve your credit score. That's especially the case if you have credit card debt.\nYour credit utilization rate—how much credit card debt you have in relation to your total available credit—is an important factor in your credit score. While many credit experts recommend having a credit utilization of 30% or less, there is no hard-and-fast rule—the lower, the better.\nBecause your credit utilization rate is calculated each month when your credit card balances get reported to the credit bureaus, your credit score could respond quickly if you pay down high credit card balances.\n### Avoid Applying for New Credit\nVirtually every time you apply for credit, the lender runs a hard inquiry on your credit report. In most cases, you'll see your credit score drop by five points or fewer with one inquiry, if at all. But if you have multiple inquiries in a short period, it could have a compounding effect and lower your credit score even more.\nAlso, adding new credit increases your DTI, which is a crucial factor for mortgage lenders.\n### Consider Waiting\nIf your credit report includes some significant negative items, such as a bankruptcy, collection account or repossession, it may take more time for your credit score to recover than from high credit card balances or one late payment.\nWhile it may not be ideal to wait to buy a home, taking some time to allow your credit history to get back on track could save you a lot of money. It can also allow you to build up a more substantial down payment, which will likely boost your approval odds. END