In a perfect world that would be fine but unfortunately the real estate market place is not so friendly. There are a few home sellers and so called real estate professionals waiting to take advantage of your lack of knowledge and your pocket book.

You have to be your own best advocate. Read everything you can about buying a home - the seven steps to buying a home provided here will give you a good foundation. It is important that you know what to ask, when to ask it and always question if you don't understand.

Step #2 - Check your Credit Rating

Check your credit rating before you go shopping for a home and well in advance of applying for a mortgage even if you think you have a good credit rating and especially if you think your credit rating might be questionable.

This is extremely important - your credit score (FICO score) directly affects how much interest you pay to a lender. This can vary by as much as $158 per month or $1,896 per year or $56,880 on a 30 year FRM.

The good news is that your credit score is not etched in stone and in most cases your credit score can be improved.

This is why it is so important that you check your own credit now. This will give you time to improve your credit before you apply for financing.

How do you check your credit rating? It is very easy - there are many web sites that offer free credit checks (Trans Union and Equifax are excellent sources). If your FICO Score is over 780, you have an exception credit rating, if your FICO Score is around the 690-740 mark, you have and average credit rating and if your credit score around 620 you have credit problems and may not qualify for financing.

Your credit score is determined by factoring together the following elements: Payment History (35% of your FICO score), Amounts Owed (30% of your FICO score), Length of Credit History (15% of your FICO score), New Credit (10% of your FICO score) and Types of Credit in Use (10% of your FICO score).

Sometimes improving your credit rating can be as simple as correcting an error in your credit report or providing a written explanation for missed or late payments.

Here is a list of common errors found on credit reports:

• A clerical error was made in writing your name or address on a credit application;


• You applied for credit under a different form of your name (i.e. Tom Black instead of Thomas Black);


• You have a common name and someone else’s information is on your credit report;


• Your social security number was incorrect on a credit application;


• Loan or credit card payments were inadvertently applied to the wrong account.
• Identity theft - someone has stollen your personal identity.

If you find an error, report the error in writing to the credit agency concerned. The credit agency is obliged to investigate and respond to you within 30 days.