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Q&A: Should I Pay Off Credit Cards to Raise My Credit Score Before Buying a House?

Q. I am watching your show "On the Money" and the topic is: "How to raise your credit score."

I have great credit: 788 on Experian. I am planning on buying my first home, hopefully by September. My only debt is $2,900 on Amex Blue.

In order to raise my score a little higher -- should I pay the entire balance off? I do have the money to pay it off. Or does it help to show that you are responsibly continuing to make monthly payments? Although the monthly minimum is $75....I send $600. This card was solely used as a balance transfer card - never charged anything on it. I do use a regular Amex card for charges.

More importantly, between July and the time I apply for a mortgage - should I NOT charge anything on my credit cards? Does having 2+ months of a zero balance on your cards raise your credit score?

Lastly, which Company (website) is the most reliable to obtain all three of my credit reports?

In advance, thank you for your time!

-Marianne

A. Marianne - You're being overly cautious. A 788 is a great score, although I question whether or not that's your real FICO score because you can't get your FICO score from Experian any longer. Be sure you REALLY have a 788 by going to myFICO.com.

Anyhow, here's what you should do: About 60 days before you apply for your mortgage be sure to have that Amex Blue card paid off, completely off. The purpose of the 60 day advance is to make sure your credit reports are updated to show the zero balance. It's comical that in 2009 you have to do it so far in advance in order to ensure that your credit reports reflect the balance but these are the cards we've been dealt.

If you can do that then your mortgage application won't have any trouble caused by credit scores.

-John Ulzheimer

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John Ulzheimer is a nationally recognized credit expert, president of Consumer Education for Credit.com and contributor to On The Money. Learn more about him at CreditExpertWitness.com.