I'm sure you have all heard that the lenders are now stricter with lending money for mortgages.  Here are ways to improve your credit so that it will be easier for you to obtain a mortgage.  If you are considering buying a home within the near future, these are the things that you need to consider.

•1.      Check your credit report and make sure you correct any errors on it.  Remember, mistakes do happen and you might be paying for someone else's poor financial management.

•2.      Pay down your credit cards. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.  This shows how well you are able to manage your money.  When you pay off a credit card, do not cancel it.  Closing a credit card will actually hurt you.

•3.      Avoid charging your credit cards to the maximum limit.

•4.      Wait 12 months after credit difficulties to apply for a mortgage. You're penalized less for problems after a year.

•5.      Purchase your big items for your new home on credit cards after the loan is approved.  The amounts added before the mortgage approval will add to your debt.

•6.      Avoid opening new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

•7.      Shop for mortgage rates all at one time. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

•8.      Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

Credit scores, along with your overall income and debt, are a big factor in determining if you'll qualify for a loan and what loan terms you'll be able to qualify for.  Remember, the better your credit score, the better rate you are eligible for a mortgage and the better chance of being approved for a mortgage.