Thank you for your question. The specific steps you need to take will depend on your current credit situation. Having said that, I can provide you with some insight into what factors impact credit, general steps you can take, and who you can contact for more specific information regarding your situation.
First, let's start with the factors included in a credit score. The following categories and percentages are based on the FICO® credit score, which is what most underwriters use when making lending decisions.
Payment history - 35%
Amounts owed - 30%
Length of credit history - 15%
Credit mix - 10%
New credit - 10%
As you can see from the percentage weightings, on-time payments and keeping credit balances low are two factors that can really help boost your credit score. You can learn more at theFICOwebsite.
Second, I recently answered another Q&A regarding what general steps a person can take to build credit. Some of these steps may apply towards your goal of obtaining a home loan. You can read ithere.
Finally, you'll want to understand what specific factors are currently helping or hurting your situation. I would recommend three actions for this:
Sign up forCreditCheck. There is a free option along with two paid options. Regardless of which option you choose, it's important to understand what's in your credit report and to know when changes occur. You'll also receive a VantageScore®. This is another type of credit score, which is likely different than the score the mortgage lender will use, but it will provide some indication as to where you currently stand.
Visitannualcreditreport.com, where you can obtain a free copy of your credit report from each of the three major credit reporting bureaus. Your credit score is not included for free, but again, knowing what is in your credit report is important.
Speak with a credit counselor who can review your report with you. You can visit theNFCC website to connect with a non-profit credit counseling agency in your area.
Please let us know if you have any additional questions, and best of luck as you work towards obtaining a home loan.