Check your credit report for accuracy, avoid large credit purchases and pay off or pay down as much outstanding credit as possible if you are in the market for a mortgage.

Lenders are tightening credit standards on residential mortgage loans and it behooves you to clean up your credit act.

The fewer reasons you can give your lender to reject your application, the greater the likelihood you'll get the mortgage you need and the cheapest rate.

If the economy remains soft, that could be more and more true.

The Federal Reserve's quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices -- a survey of 60 large domestic banks and 24 foreign branches -- found, in January, that the share of banks tightening standards on residential mortgage loans inched up to 11 percent from 10 percent in the October survey.

The numbers are relatively small, but the increases were the first two quarterly indications of noticeable tightening in more than a decade. While most lenders -- 88.9 percent -- revealed no change in their standards, there were no lenders that eased credit standards.

The tightening was more pronounced among smaller banks of which 15 percent tightened standards, compared to only 8.8 percent of large banks, the Fed reported.

In line with continued economic softness, there was a more apparent drop in home purchase loan demand -- the net fraction of respondents that reported stronger demand for mortgages to purchase homes over the past three months dropped to 7 percent in January from 40 percent in the previous survey. The share of banks reporting substantially stronger demand for the loans was also off dramatically from 14 percent in October to 2 percent in the January survey.

The Fed typically surveys the banks quarterly making the results available for the January, May, August, and November meetings of the Federal Open Market Committee. At those meetings the Fed decides to lower or raise benchmark interest rates.

The survey's questions cover changes in the lending standards and terms, the state of the lending business and household demand for loans.

On mean average, bank standards were nearly unchanged for down payments, credit scores and the extent to which loans are granted when customers don't meet credit scoring thresholds. However, in all three cases, that mean average leaned more toward tightening standards somewhat than easing standards somewhat, the Federal Reserve reported.

Fair, Isaac, the company that invented the credit scoring system most lenders use, offer the following tips designed to help you improve your credit score. They can also help you avoid the impact of banks' tighter standards.

Published: February 6, 2003

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.