You’ve decided it’s time to buy house. However, from the time you start looking for a house (actually even before you begin looking) until you close, you need to keep your credit in good standing. In order to do this, you should avoid committing the following six mistakes that can impact your credit score and your ability to qualify for a mortgage.

Mistake #1: Changing your job before applying for a loan. Lenders want to see that you have a stable employment history. A reliable work history shows them you’ll be less likely to default on the loan. So don’t quit your job, change jobs or become self-employed during your home search or loan process.

Mistake #2: Changing your bank. Again, lenders want to see stability by having a long history with your current bank.

Mistake #3: Financing a major purchase (like a car, truck, furniture or vacation) before applying for a loan. Buying a big-ticket item on credit increases your debt-to-income ratio and reduces the amount of money you’ll have available each month for a mortgage payment. Therefore, you may not qualify for the loan amount you want.

Mistake #4: Charging too much to your credit cards or making late payments. You need to show lenders that you can manage your money responsibly. Additionally, you don’t want to have large balances on your credit card accounts since this also increases your debt-to-income ratio. Note: Lenders will run another credit check right before closing. If they find too many recent purchases or late payments, this may change your loan qualifications, causing the loan process to slow down or even halt.

Mistake #5: Co-signing a loan for someone. Again, this increases your debt-to-income ratio, even if you’re not making the loan payments. If the other person defaults on the loan, the lender will expect payment from you.

Mistake #6: Having too many inquiries made into your credit. Lenders will view you as a higher risk, especially if you open credit accounts within a short amount of time. However, if the inquiries are related to your mortgage search, this shouldn’t affect your credit score since lenders will assume you are rate shopping.

By avoiding these six missteps, you’ll have a better chance of qualifying for a mortgage and buying your dream home.

For answers to more questions about credit, visit the Grandview Lending website. For help in assessing your needs and to determine the right loan solution for you, contact one of our experienced mortgage specialists for a pre-consultation session.

If you are ready to begin, please contact us today at (317) 255-0062.