Real estate investors spend thousands of dollarslearning state of the art investing techniques, receive one on one coaching,and spend countless hours driving their local neighborhoods learning all theycan about the ins and outs of their local real estate markets.  Then they make the painful discovery that theone thing holding them back wouldn't have cost them a thing.

I'm talking about your credit.

As banks and other lenders tighten their lendingrequirements, real estate investors need to take another look at their ownfinances and what they can do to improve their overall credit situation to makeachieving real estate investing success a possibility instead of a pipe dream.

If you're like the average real estate investor,what's holding you back probably isn't a credit report battered and bruised bya spotty payment history.  Instead,what's preventing you from reaching your immediate goal is poor creditutilization ? or simply having too much debt.

Poor credit utilization is easier to correctthan you might think, especially when you know exactly what it is that mostlenders are looking for.  They like tosee your existing account balances at or below 35% of your total creditlimit.  Pretend for a second that youhave three credit cards ? all with a $5,000 credit limit.  If your balances on the three cards are$1100, $1800, and $200, you're hurting your chances of getting that covetedloan approval.

The reason for this is simple:  Poor utilization.  While credit card numbers one and three areunder the 35% threshold, number two is at 72%.

There's a quick and easy solution to thisproblem.  Simply transfer part of thebalance from the credit card with the $1800 balance to the card with the $200balance.  You will probably pay a balancetransfer fee for the privilege, but in the long run your credit report will bebetter off for it.  It won't be a majorFICO score bounce, but a few points can mean the difference between an approvaland a form letter.

If your problem is simply having too much debt,you'll need to pay some of it off so you can start reaping the financialrewards available to real estate investors in control of their destiny.  The number one area real estate investors(and all Americans for that matter) overextend themselves is in the area ofcredit card debt.  If this is yoursituation there are a couple of different ways for you to tackle this debt.

The first way is by tapping into the equity inyour home and paying off the credit cards with the proceeds.  If you take this approach, you'll want toconsider closing the accounts to reap the maximum benefit of a bump in yourcredit score.  Open accounts with a zerobalance won't help your credit score nearly as much as closed accounts withouta balance.  The reason for this issimple:  If the account is still open youhave the potential to borrow up to the amount of your credit limit any time youlike. 

I know that you might be interested in usingaccess to credit card cash advances for short term financing needs, but I'mtelling you that closing accounts will improve your credit score. If youultimately decide to keep the account open so you have access to cash advances,that's your business.  However, doing soprobably isn't in your best interest, especially when you're just starting downReal Estate Investing Road.

If you don't have home equity you can tap intoto reduce your debt load and improve your credit, you'll have to find anotherway.  The fastest way of doing this is byadding up all of the balances on your credit cards ? largest to smallest,irrespective of your interest rates.  Iknow this flies in the face of the advice given by others who tell you to rankthem according to interest rate.

Pay off the balance with the lowest balancefirst while making the minimum monthly payment on the other cards.  Then take the amount you were applying to thelowest card and apply it to the next higher balance on your list.  When you pay it off, move to the next one andcontinue the cycle until you have each card paid off.  The reason I recommend you ignore your APR isbecause this strategy provides you a quick moral victory. While largelypsychological, it can have a profound impact on your overall credit picturebecause you'll likely see each small victory as proof positive that you?redoing something to get out of debt.

These are just a couple of the ways you canreduce your debt load and improve your credit situation.  By improving your credit and raising yourFICO score you can exponentially increase your chances of seeing your loanapplication approved.

Do everything in your power to improve yourcredit situation.  Don't forget to dosome of the other things that will help guarantee you reach your real estateinvesting destination.  By combiningeffective investing strategies with credit improvement practices you'll getwhere you're going much more quickly.

Then you won't use the current credit situationas a crutch to explain away why you haven't reached your goals. You'll knowthat you will have managed to pull something off that multiple Fortune 500companies couldn't: You'll be thriving in a tough market.

And that's saying something.  Because you will have done it without a hugegovernment bailout.