Most anyone who has purchased a home can attest that their first hurdle was their credit. In today’s market a credit score in the low 600s is the minimum most lenders in Maryland require for conventional loans, but these buyers may be subject to an additional point or two when it comes to interest. Consequently, getting your score as high as possible before obtaining your loan is very important.
 There are many reasons why a purchaser’s credit may be low; from missed credit card payments to late rent. However, knowing where you stand is a great place to start to get that score back up. There are plenty of free websites where you may obtain a credit report. Annualcreditreport.com is mandated by the FTC and can be used to acquire a free report once a year. Unfortunately certain items that impact your score may only be removed over time, specifically late payments. However, you can avoid these instances in the future by signing up for automatic bill pay, insuring that no future late payments will be reported to the credit card bureaus.
Now take a look at the items you CAN control. Do you find yourself often making the minimum payment on a credit card or loan? Set aside as much extra income each month to put towards those balances, and before you know it they’ll be dwindling!
This type of budgeting can also be very beneficial in practicing for owning a home. By setting aside your extra monthly income for debts, you can give yourself an idea of where your monthly income should be allocated, and in what range you would be comfortable for a monthly house payment. This way when it comes time to meet with a lender, you will not be swayed to max yourself out with the highest prequalification loan amount, but rather will be able to make an informed decision on the range that will help you live comfortably.