Many homebuyers are worried about how their credit will affect their ability to buy a home. If you have had credit problems, be prepared to discuss them honestly with a mortgage loan officer.

You can get better prepared in if you get a copy of your credit report before you apply for your mortgage. That way, if there are any errors, you can take steps to correct them before you submit your mortgage application.

A part of the mortgage loan approval is based on how you've handled credit payments in the past. A report from the credit bureau shows the type of credit you've had, whether you've repaid promptly and how well you've managed the responsibilities of credit. There are a number of legitimate reasons for credit problems, such as illness, unemployment or other financial difficulties.

Here are some tips for solving credit problems:

• Accurate negative information can stay on your credit report for 7 years. A bankruptcy can stay on your report for 10 years.
• If you are contesting a credit report, bill or credit denial, write to the appropriate company and sent it "return receipt requested".  Always include your name, account number, dollar amount in question, and the reason you believe the bill is wrong.
• Keep all of your original documents: send copies only with the written letter.

Credit Reports

There are three major credit reporting agencies. Minnesotans are entitled to receive one free credit report each year. To obtain a copy of your credit report, contact any of the following credit bureaus:

TransUnion
Annual Credit Report Service
P.O. Box 105281
Atlanta, GA 30348-5281

Experian
1-888-397-3742
P.O. Box 2103
Allen, TX  75013

Equifax
Credit Information Services, Inc.
P.O. Box 740241
Atlanta, GA 30374