How to Build Credit to Buy a House

If you have no credit or bad credit, you may not be able to get a home loan and it may take some work and time on your end to raise your credit score. Don't fret though; it is still possible to reach your dream of owning a house. You will just need to take action to raise your credit rating.

Instructions

Building Credit

1

Check your credit report to make sure that you need to raise your credit score. You can obtain a credit report once a year for free at AnnualCreditReport.com. By accessing your credit report, you will get a general overview of where your credit stands. If your credit report has any negative listings, or if you have no credit history, you will probably need to raise your credit score in order to quality for a home mortgage.

2

Open a checking account and a savings account if you do not already have both. Credit card and loan companies view having both types of account as a sign of financial stability.

3

Create a budget plan. Make a list of what your monthly income is, and what you need to purchase. Stick to the plan.

4

Apply for a credit card at a bank or credit union. Going to your personal bank is probably a good first choice. Walk into the bank and tell a bank employee that you would like to apply for a credit card. If you are unable to qualify for a regular credit card, then ask to apply for a secured credit card. A secured credit card is a card for which you are required to deposit money ahead of time in order to use it. It is similar to a check card, except a secured credit card should raise your credit report rating.

5

Apply for a store credit card, such as a department store or gas station card. These cards will not raise your credit rating as well as major credit cards or bank cards will, but they can help if you already have the other two.

6

Use your cards once a month by purchasing items you would get even if you didn't have the card, such as groceries, toiletries, or gasoline.

7

Pay off at least the minimum payment every month. Make sure you also pay your other bills on time. This is the most important step to improving your credit. Paying off the entire balance will help you out in the long run since you will not be accruing interest. It will also look better on your credit report

8

Check your credit report again anywhere between six months to a year since you started building your credit. Six months should be enough time for your credit rating to reflect a significant rise.