Know your credit score

The widely-publicized credit crunch is making it harder for many buyers to get a mortgage at a good rate, or at all. Knowing and improving your credit score is all-important if you're in the market for real estate. Thanks to valuable tips from our first-time homebuyer's class, I was able to raise mine significantly before we applied for a mortgage.

In the class I learned three important things:

[1] Get your FICO score for all three credit reporting agencies, because that's what mortgage lenders use. It costs a maddening $45 and is not provided in your annual free credit report;

[2] Credit card balances should be as low as possible -- the less debt of any kind, the better;

[3] Challenge any negative information, even if you think it may be true. The credit card company may not bother to dispute your challenge, letting you win by default.

Armed with this information, last February I swallowed my ire at the credit reporting cartel, plunked down the money for my FICO score, paid down my credit cards, and challenged a couple of late payment reports.

Both challenges went in my favor, and at the closing table last week I learned that my credit score had jumped 75 points. Combined with my partner's already stellar rating, the improvement probably helped us in our mortgage application: we were approved, and got a very good rate.