The key to getting a mortgage loan with excellent terms is having good credit. That's easy to say, and probably easier to do than you think, according to Virginia E. Cook, president of Texas' largest independent brokerage firm, Henry S. Miller, Realtors.

"Potential home buyers are usually very intimidated about applying for a mortgage," Cook says. "It seems like your entire character, everything that is going to get attention, boils down to what's on that piece of paper. But if you prepare, getting a home loan shouldn't make you any more nervous than picking out your new wallpaper."

Cook advises that you should always use the same name for all credit applications and credit cards. This includes consistent use of middle names, maiden names, or hyphenated last names. That way, there is no question of which credit lines actually belong to you instead of someone with a remarkably similar name. If you have more credit than you need, it can actually harm your chances of getting more. Lenders see the "unused credit" as potential for an uncontrolled spending spree -- which might put you so far in debt that you can't pay all your debtors, including them if they give you more credit.

"Joint accounts can cause a lot of problems on a credit record," Cook says. "Either because of divorce or simple differences in spending habits, one person's credit problems can haunt the other one's credit rating for years if they had a joint account together." There should be a frank, open discussion about financial goals and rules before couples open joint accounts. If this discussion reveals big differences between the would-be joint account holders, it is probably best to keep separate accounts, at least long enough to see if there could be problems.

And in the event of a divorce, all joint accounts should be terminated as soon as possible. Both people are still responsible for the balance due in the accounts, but at least there won't be any new charges accumulating.

Watch your mail very carefully. Offers for extended credit and new credit cards may seem like a compliment, but they can be the perfect opportunity for scam artists. "Thieves can literally steal your identity," Cook says. "If they get a piece of mail addressed to you with a credit application form enclosed, they can answer a few simple questions and get a card issued in your name. They have a good time shopping for a month, running the account up to its limits, just in time for you to get the bill. By the time you realize something is wrong, the damage has been done."

To really protect yourself, call credit card issuers, and ask them to stop their solicitations. Be sure your current credit cards have a "fail-safe" system which requires that sales merchants call their company if several large purchases are made within days of each other. Just a simple call, rather than waiting for an automatic approval code, is often enough to spot thieves and certainly enough to scare them into not using your card again.

Protect your good credit by requesting a copy of what loan agents will see when they run your credit check. You can call one of three credit bureaus to receive this report: Equifax Information Service Center at (800) 685-1111; TransUnion Corporation at (312) 408-1400; and Experian at (800) 392-1122.

Published: March 23, 1998

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