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Debt management is no easy task for most Americans, but it’s a crucial part of staying on top of your credit score and saving money for large purchases, such as a car or house. When you’re ready to become a homeowner, you’ll need to take a hard look at your finances to get a sense of your money wellness. The amount of debt you owe, what type of debt it is, and your expenses vs. income should be the focus. Next, learn more about the homes that are within your desired price range so you’ll have a solid jumping-off point and follow these steps to prepare for your first home purchase.

Boost Your Score

The higher your credit score, the easier it will be for you to secure a home loan. But it can be tricky to boost those numbers. Ideally, according to Acorns, you’ll want to shoot for something in the 760 range to ensure a low interest rate, but for some, it can take years to get to that point. Paying off credit card debt is a great way to start, but your score factors in several aspects of your credit history, including how much open credit you have, how many on-time payments you’ve made, and even your history of paying for utilities.

If you have any debt in collections, reach out to see if you can work out a payment plan. Sometimes, collectors are agreeable to lowering the amount owed in exchange for a lump-sum payment. Next, pay off those credit cards but don’t close the accounts as you’ll need established credit to bump up your score. Also, keep in mind that the age of your accounts plays a role in your score. Consider downloading a personal finance app like Vermillion, which can help you manage your spending going forward.

Survey Your Loan Options

If bumping up your credit score to something as high as 760 is currently unreachable, it doesn’t mean you should scrap your plans to buy a new home. Business Insider explains that you can still successfully obtain a mortgage through government-backed programs and various homeowner programs. For example, veterans have the distinct advantage of being eligible for VA loans. These loans typically have less stringent credit requirements, offer more competitive interest rates, and don’t require private mortgage insurance. When reviewing loans, your best bet is to talk to a lender, who can guide you toward a loan that fits your current credit situation. For example, PennyMac loan options include FHA, conventional, VA, and custom. It’s a great example of a one-stop shop lender that can guide you through the entire process.

Consider a Side Gig

Getting debt under control and boosting your credit score can take some time. If you have your sights set on buying a home within the next six months or so, it might be helpful to look for ways to increase your income. Side gigs — or part-time, temporary jobs such as driving for a delivery or ride-sharing service — have increased in popularity in recent years and are a great opportunity to earn some extra cash. If you have an established hobby — such as crafting or writing — you can even work from home as a freelancer or entrepreneur.

Buying a home takes some work, but by planning ahead and thinking carefully about the next five to 10 years, you can take the necessary steps to pay down your debt and get your finances on track. Stay on top of your credit report so you can get real-time updates on any changes or errors.

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