Getting your credit ready before you apply

The first step is not fixing anything. It is looking. Get your report, read it properly, and find out what is actually in your file rather than what you assume is in it.

Almost everyone I talk to is carrying an assumption about their credit that turns out to be either too pessimistic or focused on the wrong thing. Looking first saves you months of working on the wrong problem.

Three things come up again and again. Paying on time, every time, starting now. Bringing revolving balances down. And not opening new credit while you are preparing, because a cluster of new accounts reads as someone who is stretched.

The order matters less than the consistency. A steady few months of those three does more than a dramatic gesture in the last week.

Avoid financing a car, opening a store card for a discount, or co-signing for someone else. All three change your file in ways that can affect what is available to you, and all three are much easier to avoid than to undo.

Also avoid closing old accounts for the sake of tidying up. It usually works against you rather than for you.

The single most useful thing you can do is have someone look at your file with you. Not a score, and not a rule of thumb — your actual file, with a person who looks at these every day.

Sometimes the answer is that you are ready now and were told otherwise. Sometimes it is one specific thing worth working on. Either way, you leave knowing something you did not know before, and that costs nothing.