One of the biggest obstacles to obtaining a loan is no credit history, bad credit, or overextended finances. To successfully obtain a loan from a financial institution, you will need to establish a good credit history and show low debts.

No Credit History

For potential homeowners with no credit history, it is important to establish credit. While there are many ways to build or establish credit, we don't recommend using credit cards. Recent studies show millions of Americans are billions of dollars in debt as a result of credit card debt. Instead of using credit cards, show your good credit history with the timely payment of car, rent, utility, or student loans.

Poor or Bad Credit

Payments that are not made on time or not made at all can result in bad credit. Bad credit can stop you from getting the loan you need. If you are unsure of your credit, you can check your credit through a credit bureau.

Overextended Finances

Overextended finances can prevent you from obtaining a loan even though you have an excellent credit history. Before applying for a loan, pay down your debts. As always, go after loans and credit cards with the highest interest rates. Once a loan or credit card is paid off, apply the payments to the next credit card or loan until your debt is paid down. By doing this, you are more likely to obtain financial peace and a loan!

Check Your Credit

If you are unsure of your credit, you can get a copy of your credit report for a small fee through one of the following credit bureaus:

• Experian 1-800-392-1122
• Equifax 1-800-685-1111

Correct Your Credit

If you find your credit report is incorrect, you can contact:

www.mycreditfile.com

To correct the problem, offer the credit bureau documentation proving the vendor cleared your account. Otherwise, contact the vendor to resolve the issue.