But let's face it, the number of people who have perfect credit are far and few between. Most people have had a mark put on their credit report at one time or another. Some people have had a lot of marks put against them over the years. What can these people do as far as getting good mortgages?

One of the first things you should do before attempting to obtain any type of mortgage is to get your credit reports. There are three major credit reporting agencies, and, by law, you are entitled to a free copy from each one per year. Once you have these reports, you should sit down and carefully review each one to see if there are any mistakes or omissions.

If you find mistakes or omissions, you can write to the agency and request that your information be corrected. It is important to remember that each agency uses only its own information, which means that while one report may be entirely correct, the next may not. This is why you have to go over each one independently.

The reason you want to spend this time investigating your credit reports is because your credit scores are determined by the information on the reports. In order to be fair and accurate, credit scores are determined by set formulas that the agencies use. Erroneous information on your report will cause your scores to drop. This can be a problem when you are looking for mortgages or other types of loans.

In addition to helping you get the best mortgages, you can also help your other credit issues by correcting any mistakes that you find on your reports. Just about all lending agencies use these reports and scores in determining what type of credit and interest rates they will offer you. This includes such things as credit cards, gas cards, and even automobile insurance premiums. As you can see, your credit score can affect much more than just your mortgages.

Another benefit to reviewing your credit reports and credit scores prior to attempting to obtain mortgages is that you may discover that you are in bad shape as far as the numbers go. Some people simply have horrible credit histories and knowing if you fall into that category before you approach a bank or other type lender can be important.

It is important because with very poor marks on your history you may not get a loan at all or you may be offered a sub-prime loan which can become very expensive over time. Knowing, in advance, if you are subject to these types of offers can be helpful.

Sub-prime mortgages will usually carry a much higher interest rate than traditional fixed rate or ARM loans. The sub-prime market is a market into itself and you need to be very careful before entering into a loan of this nature. Many foreclosures take place within this particular market.