It's more important than ever to make sure your credit score is in good shape if you want to qualify for a mortgage and take advantage of a cooling market.

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Real-estate prices may be coming down, but unless you’re sitting on a mountain of cash, you’ll need a mortgage, and that’s no longer a sure thing. That means it’s more important than ever to make sure your credit score is in good shape.

A credit score is a mathematical model that analyzes information in your credit report. Lenders use credit scores to gauge the likelihood that you’ll repay your debts. A good credit score can save you thousands of dollars in interest over the life of your loan.

If you plan to buy a home within a few months, here are steps you can take to improve your score:

Order all three of your credit reports and your scores from You’re entitled to one free credit report every year from each of the three credit-reporting agencies. You’ll have to pay extra to get your credit scores, but it’s worth it, says John Ulzheimer, president of educational services for, a Web site focusing on consumer credit.

“You’ve got to know what your scores are before you can start doing anything to change them,” he says.

That’s why Ulzheimer recommends ordering a credit score from each of the three credit bureaus: TransUnion, Equifax and Experian. You can buy your credit scores when you request your free credit reports. The cost for each score ranges from $5.95 to $7.95.

Because some lenders don’t report information about borrowers to all three credit bureaus, your credit scores will vary. For that reason, you should get all three scores before applying for a mortgage, Ulzheimer says. Mortgage lenders, he says, usually base their decisions on your middle score.

Dispute errors. Scrutinize your credit reports for mistakes that could hurt your credit score, such as an account wrongly reported as delinquent, or credit information for someone whose name is similar to yours. Credit bureaus are required by law to investigate disputed items, usually within 30 days, according to the Federal Trade Commission.

With any luck, the credit-reporting agency will agree with you and remove the disputed item from the report. But consumer advocates say that correcting credit-report errors is often a long and frustrating process.

If you’re stonewalled by a credit bureau, contact the creditor that reported the wrong information. Look for documents that support your case, such as receipts or canceled checks.

And if that doesn’t work, the federal Fair Credit Reporting Act gives you the right to sue the credit bureau. You can find names of attorneys who specialize in Fair Credit Reporting Act cases at the Web site for the National Association of Consumer Advocates,

“The minute an attorney gets involved, the credit bureaus take your dispute much more seriously,” Ulzheimer says.

Pay off credit-card balances . This is one of the most effective steps you can take to boost your credit score, says John Lamb, co-author of “Solve Your Money Troubles.”

Here’s why: One of the factors used to calculate your score is “credit utilization” — your total debt, relative to the total amount of credit available to you. If, for example, your balances total $10,000, and the credit limits on all your cards total $20,000, your credit utilization is 50 percent. Reducing your credit utilization will improve your credit score, says Ron Totaro, vice president of Global Scoring Solutions for Fair Isaac, which developed the widely used FICO score.

Don’t close unused accounts. If you’re seeking to avoid temptation, cut up your credit cards, but don’t close the accounts. Closing accounts will reduce the amount of credit you have available, thus increasing your credit utilization.

Don’t open new accounts. Though this could improve your credit utilization ratio, it will hurt your score more than it helps. Opening new accounts is viewed as a sign that “you’re in financial trouble and looking for credit,” Lamb says. In addition, opening new credit cards will lower the average age of the accounts in your credit report, Ulzheimer says. That could reduce the portion of your score that calculates how long you’ve been using credit.

Pay your bills on time. Your payment history makes up more than one-third of your score, and the credit-scoring system assigns more weight to your recent payments, Lamb says. A late payment within the past six months will hurt your score more than a late payment from a couple of years ago.

— Sandra Block, USA Today