September 18 2010 (Chris Moore)

Even in these hard times there are still many people contemplating the purchase of a new home. Many economists believe that the worse is behind us and confidence is gaining, if you work for a profitable company with good stability, now would be a great time to consider purchasing a new home. Prices are the lowest they’ve been in years and as everyone knows…interest rates are at 50 year lows.

The bottom line is right now the most important thing is going to be your credit score. If you’ve weathered the economy well and didn’t fall for the “Keeping up with the Jones’” mentality concerning your spending, you will find yourself in the enviable position of getting more loan offers and the best interest rates.

The first step is to check your credit to insure that all of the information on your credit report is accurate. You can do this by contacting the three major credit bureaus; Equifax, Experian and TransUnion, or using one of the credit score companies that we use like or who’ll do it all for you in one contact.

If you find anything that’s incorrect, contact the affected credit agency to have it removed. Correcting a mistake that’s dragging your score down can make a significant difference.

Make sure you are paying all of your loan and credit card bills on time. Almost all creditors today have automatic payments available so you can at least set them up to make the minimum payment. By doing so, you’ll never have a late payment come back to haunt you.

Try to pay down as much of your balances as you possible can with using the money you’re going to need for a down payment. One of the factors in your credit score is your utilization ratio, or the amount of available credit you’re using. This is also applies to canceling current accounts that you may not be using. You’re better to keep that credit card you use once a year than to close it because it lowers the amount of available credit.

Don’t apply for additional credit. Adding a new car loan to your report can temporarily cut 20 points from your score, for instance, so if you’re planning on buying a house in the next few months, hold off on seeking any more credit.

Sure…that big screen would look in the living room, but having a home to call your own is a bigger reward.