Getting A Mortgage

According to Experian, a credit score is a number lenders use to help them decide: "If I give this person a loan or credit card, how likely is it I will get paid back on time?" The information from your credit reports is used to create your credit score.

Before getting a line of credit, get your free credit report from each of the three major credit reporting agencies (CRAs): Experian, Equifax, TransUnion. Under federal law, you are entitled to one every year. Order online at www.annualcreditreport.com, or call 1-877-322-8228. Check to make sure someone else's information isn't mixed into your report. If so, contact the CRA immediately and have them delete it.

Then, follow these tips to help you establish credit and build your credit score:

1. Establish checking and savings accounts and maintain them responsibly.

2. Piggyback on someone else's good credit by being added to a credit card as an "authorized" (joint) user.

3. Get someone to co-sign a loan for you (e.g., financing a car, or other secured loan) and make your payments on time.

3. Apply for student loans and make your payments on time.

4. Apply for a credit card or a secured card. But, make sure the issuer reports to all three CRAs. Otherwise, the card won't help you build your credit.

6. Apply for one gas card and one department store card to add to your credit mix.

7. Use your credit cards regularly, but wisely. Make all payments on time because the two most important factors in your score are whether you pay your bills on time and how much of you available credit you actually use.

Establishing and maintaining good credit will make buying a home a lot easier for you. You'd be able to get a good fixed rate loan instead of having to settle for a variable rate sub prime loan. It will also help for times you may need a home equity line of credit for home improvements or a home equity loan for debt consolidation, including paying off student loans.