Even when you pay your bills on time your credit may be lowering because of 'inquiries'. There are two kinds of inquiries that apply to ones credit, hard and soft. A hard inquiry is when you have your credit run for purchases such as a new car, new credit card, etc. A soft inquiry is when you check your own credit or perhaps an employer does. Yes an employer may indeed check your credit.
It is a great advantage for a buyer to have a higher credit score so they may receive a lower interest rate. Sometimes buyer's assume there isn't anything they can do but wait it out if their credit is low before ever consulting a professional. Sometimes it's something small that can be quickly corrected to higher a score.
Buyer's are advised to stay away from ordering new credit cards (even those store cards) or new vehicles when applying for a loan to purchase a home. Another tip is to keep accounts open regardless of whether or not you use that card. Just keep checking on those accounts to make sure you are not surprised with any new conditions such as annual fees, etc.
If you are in the market to purchase a home, please contact me. I will offer you an opportunity to have your credit analyzed free of charge or obligation with a credit counselor.