Raising your credit score
Though you may not manage to boost your credit score overnight, a few key moves on your part could bring that number up fairly quickly. First, pay all of your incoming bills on time. Your payment history is the single most important factor that goes into determining your credit score, so if you pay your bills responsibly, you'll be rewarded with a higher score.
At the same time, try paying off a chunk of your existing revolving debt (namely, that of the credit card variety). Another big factor in calculating your credit score is your credit utilization, or the amount of available credit you're using at once. A utilization ratio of 30% or lower indicates that you're managing your credit responsibly, which means that if you have a total line of credit of $10,000, you should not have more than $3,000 in outstanding balances. If you do, paying off some of that debt could bring your utilization ratio into more favorable territory so your credit score improves.
Finally, check your credit reports for errors. Fixing a mistake could actually improve your score pretty quickly. You're entitled to a free copy of your credit report from each of the three bureaus every year -- Experian, Equifax, and TransUnion.
Your credit score matters
Clearly, having good credit could play a big role in determining your mortgage's interest rate, and the amount your home costs you each month as a result. If your credit isn't great, it could pay to delay homeownership until you're able to bring up that number.
Remember, when you're hit with an unfavorable rate on an auto loan, you're stuck with it for a handful of years. When you snag an unfavorable mortgage rate, you could wind up paying it for 30 years. And while today's mortgage rates are very competitive on the whole compared to what rates have looked like historically, it's still helpful to qualify for the lowest rate possible.