Your credit history is the single greatest factor in your ability to get new credit, especially a home loan.  And this year, credit has become even more important as sub-prime and alternative mortgages have either disappeared or become much more strict in their credit criteria.  If you've had credit problems, what can you do?

This is a summary of a series of articles that will help you fix up your credit.  My new friend Lenn Harley (thanks, Lenn!) encouraged me to provide a short summary of the ideas.  If you want more detailed information on any one of the steps, just click on the link.

Step 1: Looking at your credit report.  Just like improving any part of your life, you have to take an honest look at where you are.  It's not time to panic or get depressed.  It is what it is.  You have the power, in the present moment, to take an honest look at your credit and make a change that will improve your future.  You can also learn How to Check Your Credit For Free.

Step 2: Keeping the Accounts You Have.  If you're like most people, you already have some credit...whether a car loan, a credit card, a home loan or a medical collection.  The greatest thing you can do is pay your accounts on time.  Don't have credit?  You can actually build 'alternative credit' using things like your phone bills or cable bill.

Step 3: Carefully Opening New Accounts.  When you get a new credit card or loan, be smart about it.  Do you really need a brand new Lexus to get to work?  That high payment might disqualify you from getting a home loan, which is a much better investment.  Little known fact: the more revolving credit (credit cards) you have available and unused, the better your credit score...so keep your balances low.

Step 4: Fixing Collections and Charge-offs.  That old bill that you didn't pay...it's probably still there.  That old bill that you DID pay?  It's probably still there, too!  Why?  Because the collection agencies don't care about your credit, they only care about getting paid.  Be sure to follow the detailed steps to clean up collections and charge-offs in the original article and you can get those things taken care of.

Step 5: Taking Care of Liens and Judgments.  If your credit report shows a 'Public Record' (a lien or a judgment) as Paid, Satisfied Released or Dismissed, then you're okay.  But if it shows a status of Unknown, Filed, or anything else, it's going to take some effort on your part, even if you already paid it.  And back child-support?  You're going to have to bring it current to get any home loan.

Step 6: Dealing with Bankruptcy.  Yes that bankruptcy might have relieved you of your debts, but that doesn't mean your credit report has been cleaned up.  You need to send specific parts of your bankruptcy papers to the credit reporting agencies.  If you don't have the papers, you can get them from your lawyer or even a federal records center.

Step 7: Getting a Home Loan.  Well, it's not as easy today as last year, but it's still worth doing.  A home loan is just better for you than other types of debts.  The rates are usually lower, you can write of the interest, and you're less likely to pay late which will improve your credit.  Don't let credit problems prevent you from seeing what you might be able to do today.