Our real estate agents at Josey Young & Brady Realty know that buying Atlanta homes for sale starts long before you reach out to us. In fact, many people save up for months or years before they embark on the journey of buying their own home. Even if you only have a few months to get ready, there are steps that will help! Two financial habits are essential to achieving your goals:

• Save up money so that you can easily handle a down payment or closing costs.
• Reduce your debts so you can improve your credit score before getting a loan.

Of these, it's the second one that creates the most confusion! Every time you pay down debt, you are raising your credit score. Your credit score, in turn, is a numerical representation of your good financial habits. It uses a number of factors to help lenders assess the risk in offering you a loan.

There are opportunities to raise your credit score every month. A change of just a few points can give you access to loans on more favorable terms, so knowing how your credit score works is worth the effort. Let's look at some of the best ways to improve your credit before applying for a home loan.

1. Pay Bills on Time
   Most people have predictable income from work and set, monthly due dates for bills. Still, with so many things to keep track of, it's possible to let something slip. Set up a calendar, use a mobile app with reminders, or set up automatic payments to ensure bills get out on time.
   
   
2. Pay Off Debts
   After payment history, debt level is the biggest factor in your credit score. Pay off as many debts as you can. It is usually best to focus on paying off the account with the highest APR, then move to the next highest. Before you know it, paid debts will translate into more monthly savings.
   
   
3. Prune Newer Accounts
   In general, you shouldn't close credit accounts you pay off. That's especially true of your oldest accounts. However, there's a caveat. Newer accounts can ding your credit score, so consider closing accounts less than a year old after you pay off your balance.
   
   
4. Look at Credit Types
   Having multiple types of credit on your credit report helps your score. Revolving accounts are those like credit cards, which you can continue to draw on as you pay them off. Installment accounts represent a one-time infusion of funds that you pay off in fixed increments.
   
   
5. Don't Open New Accounts
   The number of inquiries on your credit record is a factor in your credit score. In general, you should avoid opening new credit accounts until after your home loan is issued. Remember that you are always allowed to check your own credit report – that won't hinder your score.

What Doesn't Affect Your Credit Score?

There are lots of credit myths out there, including factors that supposedly harm your credit. Knowing about them will help you focus your attention on the details that really matter.

Issues that don't affect your credit score include:

• Your monthly or annual income
• Your current bank balances
• Your investment assets
• Your employment status

In general, credit score reporting companies only have access to the information lenders give them. That does not include your bank balance. However, your mortgage lender is sure to inquire about these aspects of your financial health, so be ready to document income.

Josey Young & Brady Realty can help you navigate the Atlanta market and make the right decisions throughout your house hunt. Contact us today to find out more.