For the last couple of days, we have been looking at the interplay between your credit score and how it affects a home mortgage. Yesterday we looked at how your credit score affects your home loan interest rate, and Tuesday we looked at how poor credit can affect whether you even qualify for a home mortgage. Today we will look at how you can boost your credit score so that you have a better chance of getting that home loan for a great interest rate.

Your FICO score

Your credit score is expressed as a FICO score. The higher it is, the better your credit. Once you start dipping below 620, you are moving into problem range. Decent scores are at about 680 and above (one of at least 720 can get you just about anything). There are several factors that go into determining your FICO score, so there are some things you can do to improve your credit score. Here they are:

• Pay your bills on time. This includes utility bills and housing bills as well as credit card bills.

• Make at least the minimum payment on all your loans (credit cards are loans, too!).

• Try to get your credit card balances down. The closer they are to the limit, the lower your credit score.

• Keep at least one or two cards that you have had for a while, since it shows that you have a long credit history.

• Keep your debt-to-income ratio low. You want to show that you do not already have a great deal of debt.

Read about another way of figuring your credit score, VantageScore.

Tags: credit score, home mortgage, qualify home mortgage, home loan,
home loan interest rate, FICO score, improve credit score, VantageScore