A good credit score often translates to getting better mortgage rates and more favorable terms on your mortgage. This can result in many thousands of dollars in savings. There are some steps you can take to help repair your credit and gain a better chance at receiving these rates. Here are five tips on how to do this.

1. Getting your credit report and reviewing it for errors can help repair your score. After doing this, you can notify the appropriate credit reporting agency if there are any mistakes, thus gaining a better score. These reports are offered free of charge at annualcreditreport.com and can be requested yearly.

2. Another way to repair your credit is to consolidate two or more debts into a single balance. Your score reduces when a greater number of accounts exist. For example, you might be able to consolidate the debt from separate credit cards or multiple student loans. This will also reduce the chance of accidental late payments, while saving money on checks.

3. If you have taken out few or no loans (cards, mortgages, auto, etc) in the past, consider borrowing a reasonable amount of money at a relatively low interest rate and paying it back on time. However, you should first check your report to see if many utility or other payments have been recorded; this may not be necessary, esp. if you have high income.

4. Pay off some of your current debt balances if possible. Even when monthly payments are received on time, greater amounts of existing debt have a detrimental effect upon your credit score. This includes any money you might owe on car loans, credit cards, or student loans. Prioritize getting rid of debt with high interest rates first.

5. If there is significantly negative data on your credit report, such as a past foreclosure or bankruptcy, it may be best to wait until later before applying for a mortgage. The score will slowly repair itself, and getting better rates on a mortgage or other loan will eventually become possible.

Following these credit repair tips can be quite worthwhile. For example, even a half percent difference in interest rates on a $150,000 thirty-year mortgage will generate about $50 in savings each month, or eighteen-thousand dollars overall. Other ways of getting better mortgage rates include choosing a shorter mortgage term, paying points, and comparing the rates offered by different banks.