When you open a credit account, you are essentially betting on your future. That’s a big deal, especially when you decide to become a homeowner.

Your credit score is a big factor when determining the terms of your mortgage. The relationship between your financial health and your credit worthiness are directly correlated. In short, poor credit can lead to loan rejection.

Here are some ways to build up your credit so you can properly set out on a path toward home ownership.

Focus on Your Active Debt

Come up with an aggressive plan to take on your current debt. Debt that you do not make progress on over time becomes damaging. Addressing this kind of credit quickly helps boost your score.

Put Your Existing Credit to Use

If you can use your existing credit responsibly, you can boost your score. Generally, you should aim to keep your credit balances low on a monthly basis. Aiming for a 30 percent ratio is ideal. In other words, if your credit amount is limited to $1,000, your monthly balance should not be higher than $300 toward the backend of the billing cycle. A percentage of any amount will likely still count against your overall ratio, however.

Get More Credit

If you don’t have much of a credit history then your credit score may suffer. As you plan for your future as a homeowner, you may consider opening credit accounts in order to develop a credit history as a way to show you aren’t a risky borrower.

Continue to Work on Good-Standing Accounts

Keep making regular payments on credit accounts that you currently have that are in good shape. Regular payments boost your score. Making payments over the minimum amount required also is a good tactic. Showing that you regularly make payments on time shows credit bureaus, and as an extension, lenders that you are a trustworthy borrower.

Buying a home can be the biggest purchase you’ll ever make. A good credit score makes the process run smoother. Find out what your score is and if it needs to be improved, then work on it before entering the real estate market.

If you have any questions about the best ways to manage and improve your score, feel free to speak to one of our mortgage professionals. Remember, it’s better to know now instead of when it really counts.