Don't make major credit purchases

It's important not to make any major credit purchases if you are planning on buying a home soon. Any monthly payments you are making will decrease the size of loan you qualify for by a ratio of about 100:1.

Let's say you have a new car payment of $350/mo. The amount of money you are qualified to borrow from most lenders will be about $35,000 less (100 x $350) than what you might have been able to borrow without that car loan. The same goes for consumer spending like credit cards, department store cards, etc.

In general, it's best to pay cash for items you need and keep your monthly credit payments low.