Credit is something most people don't think about until a lender tells them something about it. Afterward, there's a rush. You're in a better position than you think because you still have time to do something about getting a home in the next year or so, at least.

This is how I'd go about it, in the way that makes the most sense.

First, find out what the provider will really see

The number on your bank app could be, say, 690. A credit lender might want to see something around 660. That's fine. Lenders usually use older versions of FICO. They get scores from all three bureaus and choose the score in the middle.

Get your three free reports at AnnualCreditReport.com and read them all the way through before you do anything else. It's dull, but this is where most of the simple wins are. Do not wait to talk to a lender or a HUD-approved housing counsellor. Do this even if you are not ready to buy yet. It doesn't cost anything to get most of them to tell you what's stopping you.

Standard loans need around 620 points, FHA loans can work with scores as low as 580 (with a 3.5% down payment), and the best rates start around 740. These are just rough numbers because many lenders set their own higher cutoffs.

First, fix the mistakes

Credit report mistakes happen more often than most people think. A payment that was supposed to be late, an account that isn't yours, and the same collection mentioned twice. If you find any, you should write to the bureau and dispute them, including any proof you have. Most of the time, they have 30 days to look into it. If the creditor can't confirm the item, it's taken off.

This is free, and you'll get the most out of your time. Do not skip it.

Give up making new issues

Mortgage underwriters care a lot about your recent payment history. It will hurt you a lot more to be late with a payment from last month than from five years ago. So pay off all of your debts and set up autopay for all of them, even if it's just the bare minimum. While you're at it, don't forget to make a payment. Weeks of work can be lost with just one slip.

Spend less on your cards

This could be the one thing on this list that you do. Utilisation, or how much of your credit limit you're using, changes every month. This is one of the few things that can quickly change your score. Keep your balances below 30% on each card, and if you can, below 10%.

One small tip: pay off your debt before the end of the statement period. Since that's what most people record, your balance may seem low even if you use the card a lot during the month.

These changes will take time to show up, so do this two or three months before you apply.

Before paying off collections, give it some thought

People are shocked by this. It's not always good for your credit score to pay a collection, and sometimes it can make an old bill look like it was just due. Different loan programs have different rules about how to handle collections. So talk to your lender first, then make up your mind.

You should write down the pay-for-delete deal before you send the money. A promise over the phone doesn't mean much.

Do not forget that it's not just your score that matters

Lenders also look at your debt-to-income ratio, which shows how much of your monthly income is used to pay off debt. At the same time, some systems let you have more; most like it to be around 43% or less. If you pay off a small credit card or car loan, it can help this number even if it doesn't help your score much. Stability at work is also important, so if you can avoid moving jobs right before applying, that's best.

Don't mess it up at the end

This one comes up a lot. When someone is pre-approved, they feel good and then pay for furniture or a car before the close. Your credit score can change overnight if you open a new account, which is why lenders often check it again right before the closing. From getting pre-approval to closing:

• Do not get any new credit.

• Do not shut down old accounts.

• Do not sign anything with someone else.

• Don't move a lot of cash around without leaving a record.

• Quickly respond to what your lender asks for.

How long this takes

Three to six months of steady work can really help if you have a few problems that can be fixed. You should expect it to take longer if there is something bigger, like a recent repossession or default. For some loan programs, there are waiting periods after those, so talk to a lender about what you need to do.

A rough plan: one year from now, get your reports and start arguing about the mistakes. Six to nine months from now, keep paying off debts and deal with collections. Three months from now, keep everything the same and get your papers together. Then get checked out first and look around.

Get help or do it yourself?

You can do all of those things for free. There is no need to pay for the arguments, the goodwill letters, or the paydowns. A company gives you time and makes sure they do what they say they will do. This is helpful if you have a lot to do or a deadline.

Heads Up Financials is worth a look if you want more than just disagreement letters. It can fix your credit on all three bureaus and give you a six-month, one-on-one mentorship with a financial audit and a plan built around your goal, which could be useful for someone who wants to buy a house. Legally, a company can't promise you a certain score or that your mortgage will be approved. Before you pay anything, get the prices, billing dates, and contract terms in writing.

A few quick answers

I have bad credit. Can I still buy a house?

When it comes to FHA loans, most of the time, yes. You may have to pay a higher rate, though. That's why it's important to fix your credit first.

Do I have to pay each set of bills first?

Not all the time. For each loan and lender, the answer is different. Before you pay, ask.

How long should I wait to apply after I fix things?

Wait a few months for the changes to show up on your reports. Until then, keep everything stable.