Before you start shopping for your new home, it’s a good idea to improve your credit. First-time home buyers often get blindsided by higher interest rates or even find it hard to get approved for a home loan due to their credit.

While your credit is just one of the factors used for approval when buying a home, it’s a vital one. The higher your score, the easier it is to get approved, and the better interest rate you will get.

If you’re considering buying a home soon, it’s time to improve your credit. Here are some of the top tips to help you improve your credit score before home shopping.

Top 6 Tips to Improve Your Credit Score

1. Know What Your Credit Score is

Before you can go about figuring out how to improve your credit score, you should know what it is. You can pull your free credit report from a number of different websites and you should.

If your score is below 680, it’s a good idea to work on improving it before you buy a home. Even if you have a score between 680 and 720, you can do some things to improve your credit before buying a home.

Those with credit scores below 620 will certainly want to work on their credit before deciding to buy a home. The lower your score, the harder it will be to get approved for a home loan.

2. Bring All Accounts to Current Status

If you have any accounts showing up on your credit report as delinquent, bring them to current. Whether your 30 days behind or 120 days behind, work on getting these accounts current before you do anything else.

Catching up on any payments you’re behind on is one of the fastest ways to boost your credit score.

3. Dispute Errors

Sometimes, errors get reported to credit bureaus. If you find errors on your report, dispute them immediately.

It’s possible something wasn’t reported properly or it wasn’t even your account. No matter the error, dispute it and you might be able to increase your credit score.

4. Pay off Accounts with Low Balances

If you have any smaller accounts you can pay off, this is a great way to increase your credit score, especially judgments or delinquent accounts.

Along with helping to increase your credit score, paying off smaller accounts can lower your debt-to-income ratio. Any account you can pay off will help. Even if you cannot pay off the balance, if you can lower it, you will likely see a boost in your score.

5. Keep Credit Card Balance Low

Did you know, running up a high balance on a credit card actually hurts your credit score, even if you pay on time? You want to keep your credit card balance at lower than 25% of the credit limit at all times.

For example, if you have a credit card with a $1,000 limit, don’t carry a balance of more than $250. One of the best ways to improve your credit is to pay down credit card balanced until they are lower than 25% of the credit limit.

Another way to get a boost in your score is to ask for a credit increase. If you carry a $500 balance on a card with a $1,000 limit and you can get that limit increased to $2,000, you’ll be at 25% of the credit limit.

This is known as your credit utilization rate and Bankrate.com does a good job explaining what this is in great detail.

6. Avoid Applying for New Accounts, When Possible

New lines of credit cause a hard inquiry on your credit report. This will lower your score temporarily, which can hurt when you want to buy a home soon. The close you get to shopping for a home, the more you want to avoid opening new credit accounts.

Once you enter the home buying process, especially if you’ve been pre-approved for a mortgage, you want to avoid any new credit accounts. Wait until after you’ve closed on the home and moved in to open any new accounts.

There are many ways to improve your credit score before shopping for a home. It’s important to understand how credit works and how it might impact your loan approval. Even boosting your score 10 points can make a difference if it bumps you up to a new tier with a lender.

It doesn’t take much with a home loan to cost you thousands of dollars in interest. If you can save 0.25% on the interest rate, it can save you a large amount of cash over the course of the loan. Boosting your credit score will help you save money on your mortgage, especially if you’re a first-time homebuyer.