Interested in buying a house but worried about your credit? It's easier than you think to prepare your credit rating. I'll demystify how to prepare your credit to buy that dream house.

3 Steps to Prepare your credit to apply for a home loan

1. Order your credit report at

This is the only real source of free credit reports. Review the items on your report.

If you're still saving up your down payment, now is a great time to prepare your credit report to shine. If you need to clear up some items on your credit report, it's better to do it now than be disappointed when you can't put that offer on your dream home.

2. Set up auto-pay for payments

One missed payment can lower your credit rating, which can either increase the amount you will need to pay for interested or even put you out of the running for a loan.

3. Don't make any major purchases

Put that money towards your down payment and don't finance any new purchases or open any new credit cards. Any new loans can change your debt to income ratio, which could also stall your loan process. Some buyer find out about this in the last few weeks of closing and it's devastating when they can't buy that house.

4. Calculate your debt to income ratio

One of the easiest ways to avoid disappointment when getting pre-approved and closing is to keep tabs on your DTI (debt to income ratio). This is one of the indicators that lenders use to see what you can afford. If the ratio is too high, they may not lend to you. Knowing this number will allow you to curate your credit and ensure you have a favorable ratio.
Debt to income ratio calculator