As careful as you try to be, there are many factors that can hurt your credit score and make it more challenging to buy a house. The good news is your credit mistakes don’t have to block you from achieving the dream of homeownership. Read on to discover some common credit challenges, and how you can begin to fix them.

You’ve missed payments: Paying bills late or missing payments on credit cards, loans, or bills entirely can significantly dent your credit score. Payment history often accounts for a significant portion of your credit score. For that reason, it’s very important to stay on top of due dates.

How to fix this: Automate your bill payments so you don’t have to think about it and you don’t have to worry about damaging your credit simply because you forgot to pay your bill. Most companies will allow you to have payments automatically deducted from your checking account – just make sure you have the money to cover the payments.

You’re using too much credit: If you have significant debt, that can put a damper on your credit score. You never want to charge up to your credit card limits. In fact you should aim to use no more than 30 percent of your total available credit at any given time.

How to fix this: Stop buying things you don’t have the money to pay for immediately unless it’s an emergency. Eat out one less time each week and put those savings toward your debt.

You’ve applied for a lot of credit in a short amount of time: Think twice before applying for that department store credit card. Each credit application triggers a hard inquiry on your credit report. If you have multiple hard inquiries within a short period of time, that may suggest to lenders that you’re seeking too much credit, and that could potentially lower your score.

How to fix this: Don’t open new lines of credit unless you have to, particularly if you have plans to buy a house in the near future.

You’ve closed an old account: While you might feel like closing a credit card account after you’ve finally managed to pay the debt off, doing so can cause your credit score to go down. Having longstanding credit card or loan accounts can boost your score, and if you close one of these accounts it could have the opposite effect.

How to fix this: Pay the debt off and keep the account open. If you don’t trust yourself not to run the card up again, physically store the card in a place you can’t easily access it or cut the card up.

You’ve defaulted on a loan: Defaulting on loans or declaring bankruptcy can hurt your credit score. However, if there are extenuating circumstances such as a job loss or medical condition, some lenders may still work with you. You can also learn from the experience and avoid repeating the same behaviors that got you there in the first place.

How to fix this: You can’t change the past, but you can move forward to improve your credit in the future. Work with a nonprofit homeownership organization such as HomeFree-USA to improve your credit and build a brighter future.

You have errors on your credit report: More than a third of Americans have found mistakes on their credit report. Unfortunately, mistakes on your credit report can harm your score.

How to fix this: Review your credit report by getting a free copy from Also, check your score regularly through TransUnion’s CreditView Dashboard. Regularly reviewing your credit report allows you to catch and rectify any errors that might unfairly impact your score.

You’ve experienced a foreclosure or repossession: If you default on mortgage payments or lose property due to repossession, it can severely affect your credit. These major negative events can significantly lower your score.

How to fix this: Work with a nonprofit such as HomeFree-USA to rebuild your credit and restart your financial life.

You’ve co-signed for someone with poor credit: Though you might have had the best of intentions, helping a friend or family member by co-signing a loan also might harm your credit if they don’t make timely payments. In fact, you could find yourself responsible for the loan if they decide not to pay it.

How to fix this: Don’t do it. Your credit is too important to put its future in someone else’s hands, which is exactly what you’re doing if you co-sign for them and have to hope that they pay the debt off in time.

While negative impacts on your credit score can be daunting, they are not irreversible. With time, dedication, and smart financial decisions, it’s possible to rebuild and improve your credit standing. To learn more about how to get credit-ready for homeownership take HomeFree-USA’s course “Get Credit Ready for Homeownership“.