If you are preparing to apply for a major loan; for example, buying your first home; you may want to do some preparation beforehand. Good or bad credit may not even be your concern. You might say, “I don’t have any problems.” You have had no bankruptcies or serious financial problems. You might not even be worried about checking your credit report. This could be a mistake on your part.

Give Yourself a Bump Up

Even is your credit is not really bad you may want to consider boosting it up before applying for your loan. Why? Because the difference in your credit scoring could result in the difference of several thousands of dollars on your loan.

There are ways you can make decent credit even better if you are willing to invest a little time.

Credit Cards

If you have credit cards you may want to consider getting rid of some of your accounts. But be choosey. Keep your oldest account open because creditors also look at the length of the credit history. If you close out your oldest accounts and just keep the newer ones it will appear that you are new to credit accounts.

It is often recommended that you close all credit card accounts and just keep one or two. However, if the cards you close out have an almost zero balance and the ones you keep are at their maximum, then that could be a red flag to creditors. You will look like you are the end of your credit limit with no room for emergency payments. It could be a better idea to spread your credit card debt out evenly over the cards you own.

Pay Down

One of the best things you can do is to steadily pay down, or bring the balance down, of any accounts you owe. This looks good to creditors. It means you are doing what you can to stay within your budget and pay off your bills on time. Whenever possible pay more than the minimum payments on credit cards and other debts.

Stay Put

Do not move around often or change jobs frequently. This is a red flag to creditors. They do not like to extend credit to people on the go. There is always the chance they will have to hunt you down to get their money back. And if you are changing jobs often then you income is unstable. Neither situation is good in the eyes of creditors.

Check for Mistakes

Mistakes happen and the world of credit reporting is no different. Mistakes can cost you, because the creditor has no way of knowing that what is listed is a mistake. It is up to you to check out your credit report and report any mistakes. Look for bills that are listed as unpaid (when they were paid), debts more than seven years old, and anything else that does not look like yours.