For many of us, debt is a way of life. Installment payments and credit cards can be useful financial tools. But if not controlled, credit eventually can control you. To qualify for a mortgage, your credit history doesn’t have to be spotless, but your history must clearly show your willingness to pay your debts.

When you apply for a mortgage from any lender, they’ll look at your credit report to see if you’ve been responsible about managing your debts. Your credit report can be obtained from a credit bureau - an agency that gathers statistics on individual payment records on loans, credit cards and other debts.

Federal law gives you the right to review your own credit record, and it’s smart to do so before you apply for a loan.

When you get your credit report, look at it carefully for any past-due amounts or "charge-offs", which means a bill was never paid. Remember that poor credit will prevent you from qualifying for a loan. Make sure the information about you is correct. Your lender may need a written explanation for any late payments.

Creditor- The party that loaned money or allowed a charge purchase

Reported Date - The date the creditor provided information to the credit bureau

Open Date - Date the account was opened

Type - Type of debt - "CHG" is revolving debt or credit cards, "I" is installment loans

Amount The total borrowed or the available limit on revolving credit

Times Past Due - The number of times you’ve made late payments

Collection - means the creditor referred your account to a collection agency

Plan your purchases to use cash instead of credit. If necessary, postpone major purchases until you can save the money .

Avoid making large purchases before you buy a house

Know what you owe on all accounts

Contact creditors immediately if you have a problem

Save money on a regular basis so you have it to fall back on in case of emergency