Mortgage lenders closely examine your financial history to determine whether to approve your loan application.

Of primary concern are:

1. Your credit report, which details your payment history on all loans, bankruptcy filings and other financial information.
2. Your credit score, which uses your credit report to arrive at a numerical representation of your overall creditworthiness.

Credit scores (sometimes called FICO scores) range from the 400s to about 900, national average being about 680.

Factors Used To Determine Your Credit Score Include:

1. Past delinquency: Those who have failed to make payments in the past tend to do so in the future. The more recent a delinquency, the more it counts against you.
2. Length of credit: The longer you've had credit, the better.
3. Credit use: If you're "maxed out" or close to your credit limits, you're viewed as risky.
4. Mix of credit: Someone with a combination of revolving and installment debt is considered less risky than one with only a secured credit card.

The higher your credit score, the less risky you appear to a lender. A good credit score will help you qualify for a mortgage loan and obtain better terms

Cleaning Up Your Credit Report

Because an estimated four out of five credit reports contain some kind of misinformation.

Tips for cleaning up your credit report:

1. Look closely for any errors and correct them.
2. Note late payments and credit balances.
3. Compare account numbers to make sure they're yours.
4. Resolve outstanding bills.
5. Pay all bills on time.
6. Learn more about credit scores and how they're calculated.