When you are applying for a home loan, there are a few things that you should consider about your own financial status before you go any further into the application process. There are several factors that home loan lenders will consider when you apply that can either make or break your ability to get the loan. Having outstanding debt is one of those factors.

Having credit cards in collections basically means that you have credit card debt, and that you have made late payments or have failed to make payments altogether. This results in having the credit card company and the collection agencies they work with after you

constantly, trying to get you to pay the money that you owe. Ignoring those agencies is only going to get you into deeper trouble than you already are, but that's another story.

The fact is that it's going to look really bad to your potential home loan lenders if you have failed to make payments on your credit card. That shows that you have not been responsible in your credit management, therefore leading to the assumption that you will not manage your home loan payments wisely either. Why should they believe you when you say that you will not make the same mistake twice? After all, most people who have gotten into the routine of making late payments and ignoring the credit card companies and collection agencies when they call to "collect" usually have a hard time breaking that habit.

The fact that you have debt at all is not going to help either. Potential lenders will look at it like this: If you have had trouble making your credit card payments, you will probably have trouble making home loan payments, to say nothing of making payments on both of these debts combined. The best way to ensure that you get a home loan is to get rid of all your extra debt. Sure, easier said than done, but if you cannot do that, you should at least make timely payments to show the home loan lenders that you are capable of making payments on time and in full, to them and to any other creditor.

Your FICO score, or more commonly known as your credit score, plays an important role in getting a home loan as well. However, if you have failed to make payments on your credit card balance, your FICO score is going to suffer. Because of this, even if you have an average credit score, the chances of you getting a home loan are slim because of your irresponsibility concerning your credit card debt.

The lowest your FICO score can be to get a home loan is around 580. That's only when you don't have any other discrepancies, like overdue credit card payments. The best way to get a home loan is to keep your credit report clean by making full and timely payments.