It always is exciting to begin looking at homes for sale in your area, bigger and perhaps nicer than the property you currently own. Before you let the excitement carry you away and make an offer for homes for sale, first check your FICO score to ensure you can purchase homes for sale at the best rate.

If your score is below 600 for any reason, you need to take corrective action. Better to put off looking for homes for sale, until you can purchase one at a good rate. Otherwise, you will be paying thousands more than necessary for your homes for sale over the life of the mortgage. A score below 600 puts you at a disadvantage with homes for sale lenders; but with dedication and lots of effort on your part, you can improve your FICO score and get the better mortgage rate and terms for your homes for sale. This article gives you ways to improve your FICO score and your credit report.

Payment History

Your payment history accounts for 35 percent of your FICO score and has the biggest impact on purchasing homes for sale. It covers your timeliness of payments, bankruptcy, liens, wage garnishments, collections, delinquent accounts, and the severity of the delinquencies — all very important data to the homes for sale lender. Do the following to improve your payment history:

• Catch up any delinquent bills and make them current. Begin with the revolving credit accounts and then the smallest to the largest account balances. Then, stay current.

• Begin paying all bills on time.

• If you find yourself having financial problems, contact your creditors immediately — before you are late on payments. They can help you with temporary remedies that may not impact your credit rating. If you are truly in debt and do not know what to do, contact a reputable credit counselor, generally a nonprofit firm, to help you learn to manage your finances responsibly.

Even after you pay off collection accounts, they may impact your ability to purchase homes for sale. They will remain on your credit report for seven years.

Total Amount Owed This accounts for 30 percent of your FICO score, a big factor when buying homes for sale. It covers how much you owe and how many of your credit lines are being used. Improve this area by:

• Keeping your debt-to-credit ratio low. Otherwise, if you have a total credit availability of $20,000, for instance, and total owed of $10,000, then your ratio is 50 percent. High ratio percentages are negatives to homes for sale lenders. At the most, 75 percent is barely acceptable to the homes for sale lender; 35 to 25 percent is best. So, pay down your total debt to improve this ratio, lowering your credit card debt first.

• Pay off your debt. Do not just move it around. The debt-to-credit ratio makes it useless to move what you owe from one credit to another.

• Leave unused credit card accounts open, especially when they show a good credit history in the past. Close them and you do two things — (1) raise your debt-to-credit ratio by lowering your credit availability, and (2) it wipes out the history for the cancelled accounts, if no balance.

• Do not open new credit card accounts just to increase your credit availability level, especially if you do not plan to use them. Too much credit capacity is as high a risk to homes for sale lenders as a high ratio.

Length of Credit History

How long you have been establishing credit accounts for 15 percent of your FICO score, as well as how active your accounts have been. Do the following to improve this section before buying homes for sale:

• Do not open a lot of accounts too rapidly. It will lower your average account age, especially if you have established credit in only the past few years. It also makes you look risky to homes for sale lenders.

• If you have older accounts that you do not use, consider making small purchases and paying them off within six months to continue building a positive credit rating.