One of the most challenging loans to get approved for is a mortgage loan. It’s very important that your credit score is in a good place because it will affect the mortgage rate for which you qualify. A high mortgage rate can literally cost you hundreds of dollars a month. Therefore, it’s well worth the little effort it takes to clean up your credit report and improve your credit score prior to getting a mortgage loan.

Many readers have asked me the quickest and easiest way to fix up their credit report and credit score when they are ready to buy a home. The steps below will help you improve your credit score so you can get the best possible mortgage rate.

Note: I strongly recommend monitoring your credit report and credit score so you can keep track of your progress. TransUnion has the best credit report monitoring in my opinion, plus they include your credit score for free.

1. Request a Goodwill Adjustment for any negative items on your credit report

The most important thing you need to deal with before getting your mortgage loan is removing negative items from your credit report. This can greatly increase your credit score. Carefully look over your current credit report to find any negative items such as late payments, collections, and charge-offs.

Next, you’ll want to write a goodwill letter to each one of the original creditors for the negative items. A goodwill letter is basically a letter where you explain your situation, why the negative item occurred, and that you’re trying to apply for a mortgage loan. Then you ask them to forgive it and remove the item from your credit report. It sounds strange, but it works. The easiest way to write a goodwill / forgiveness letter is to use the sample goodwill letter I created as a template.

2. Get your credit card balances under 15%

Another thing that mortgage lenders will take a good look at is your credit card usage. In other words, if one or more of your credit cards are maxed out (or close to it), you need to get these paid down. In addition to paying down individual credit cards so the balance is under 15% of your available credit, you also need to make sure your overall balance-to-limit ratio is under 15%. Use my Balance-to-Limit Calculator to see where you stand.

3. Avoid applying for any new loans or credit cards

It’s important that you don’t apply for any loans such as a car loan or credit cards while you’re in the process of getting a mortgage loan. The reason for this is that whenever you apply for any new loan or credit card it will show up on your credit report as a hard inquiry. A hard inquiry basically means that you’re seeking out credit and it looks bad when you’re in the process of getting a mortgage. Therefore, wait until after you’ve closed on your new house before applying for any other loans.

4. Get a Professional to Help You

Keep in mind that doing the steps above will take some time, probably months. So if you want to save time, consider having a professional handle it. Lexington Law Credit Repair can help you remove negative items quickly. Check out their website.

If you’d like to compare mortgage rates and see where you stand, RateMarketplace will show you up to 5 quotes.