A bank will only lend you money if they are completely sure your credit is strong and your have the ability to pay them back, with a low probability that you will default on your payments. Your credit score is determined by the three credit reporting agencies- Experian, Transunion & Equifax. If you choose not to obtain your credit score first, then a lender or mortgage broker can find this for you. If they determine your credit is too low to get a loan, you must take some necessary steps to improve your credit rating.

How to Fix Your Credit Problems and Establish Good Credit

We all know that nobody is perfect. Many of us have had hiccups on our credit for one reason or another. Review your credit report to ensure there are no mistakes. If you find an error, talk with the reporting agency about getting it cleared up immediately. Follow these useful tips to get your credit back on track:

• Begin to pay your bills on time-and in full. This is absolutely crucial to improve your credit. If you are organized and timely with your bills, usually the rest will fall into place.
• Limit the number of credit cards you use. Two to four at most. This is so you can keep track of them and not spend beyond your budget.
• Don't make large purchases with credit (ie-cars, furniture, major electronics, etc) when you decide to buy a home. These items will drag your credit down.
• Keep a separate checking and savings account.
• Keep the same job as long as possible. If you do change jobs, lenders prefer to see that it's in the same, or similar, line of work.

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Courtesy of Coldwell Banker Residential Brokerage. For more information visit www.coldwellbanker.com