People rent apartments or houses instead of owning their own home for a number of reasons. Some renters enjoy not having to deal with fixing things around the apartment, or having to take care of things outside their residence.

Others rent because they think they cannot afford a mortgage. In addition, many renters run into trouble when trying to secure a mortgage loan because they pay for most things with cash, check, or money order.

It may take a little longer, and require some changes in the way renters pay for things, but it is not impossible to realize the dream of owning that first home.

Mortgage companies want people to have credit. Most certainly, they want to loan money to people who make payments on their credit cards, on time. One thing that can hurt people trying to qualify for a home loan is that lenders do not like to give money to people who have no credit history at all.

If you rent and do not own any credit cards, and you have made the decision to look into buying a house, there are steps you can take anywhere from six months to a year before you begin house hunting.

First, start retaining your check stubs, money order receipts, and anything else in writing for things you pay for on a monthly basis. Save statements on utility bill payments, whether you pay online or by snail mail. Upon request, utility companies will send an annual statement noting how long you have been a customer of theirs, and will note that you make payments on time.

All of this is what mortgage companies call credit lines. They use this information in place of credit card accounts listed on your credit report. It may seem like a lot of paper to save, but it is well worth it.

The next step towards securing a home loan is to request your credit report from all three credit bureaus, Equifax, Experian, and TransUnion. Creditors may report different accounts to one credit bureau and not to the others.

Go over our credit report like a forensics specialist

When you obtain your credit report, you need look at every item listed, including your personal information and employment history.

Many people find errors in every section of their credit report. Pay particular attention to the following:

· Birth date

· Current address

· Employers

· Previous addresses

· Years lived at previous addresses

· Years worked at current employer

Credit bureaus often list incorrect dates of birth. Many people discover spelling errors on their credit reports. If a credit bureau spells your name wrong, the chances are good there are other errors on your report.

Occasionally, credit bureaus have people living at two residents at one time. This occurs when a creditor sends negative information about an account you had while living at your previous address. There are even cases where credit bureaus list previous addresses as General Delivery. Some may also find that credit bureaus have them living in two places simultaneously. Check the dates as well as the addresses.

Under the employment section, check the name and address of present and former employers. Credit bureaus make mistakes on everything from the years you worked there, to the correct name and address of the employer. Also, check the dates they list for the years you worked.

There are potential reasons for these errors. One is that the people recording this information are not as meticulous as they should be when dealing with others' personal information. It is imperative that you correct all of your information. You can call the credit bureaus and they will let you know how to verify the information you claim in wrong. If they instruct you to send documentation, send a letter with the corrections to all three credit bureaus, asking them to change this information on your credit report.

Mail your letters certified with a return receipt request from the post office, so there is no question as to whether or not they received the information. Once you receive notice that the post office delivered your letter to the credit bureaus, call them, and make sure they changed the information on your credit report. Unfortunately, that is not the only action you may need to take. The next step may take longer.

The rest of your credit report will contain your credit history. You might see items listed under the following categories:

· Public Records

· Collections

As a renter, you run the risk of property owners reporting to the credit bureau if you were ever late, even one day, paying your rent. This would normally only happen to tenants in apartment complexes, or to those who do not have the best relationship with their landlord.

There may also be reports from electric, gas, and telephone companies if at any time you made late payments on your monthly bills. You may be able to remove these items from your credit report, depending upon a few factors.

There are fair credit reporting laws in effect and you should check the laws in your state. The average length of time a creditor, whether it is a landlord or a utility company, may report late payments to credit bureaus is seven years.

For example, if the electric company reported to the credit bureau that you have an outstanding balance, and it has a date of less than seven years old, check to make sure it is a legitimate account, that it is yours. If it is, you may be able to work out a payment plan, provided they agree to remove it from your credit report. The same holds true for property owners.

If, however, any account on your credit report is more than seven years old, you need to write a letter directly to the person who claims you owe them something. In your letter, tell them they are in violation of the Fair Credit Reporting Act and that they should immediately contact the credit bureaus and remove this account from your credit report. Send this certified as well to ensure delivery.

There is one extremely important thing to remember. If you see the name of a collection agency anywhere on your credit report, under no circumstances should you ever contact the collection agency. If you contact them, they will report the account as a new one to the credit bureaus, stating the account started on the day you made the phone call. Collection agencies have done this many times. Always deal directly with the people who owned the account in the first place.

All of this could take as long as a year to accomplish. It will be worth it to you, though, if you want to stop renting and start living in your own home. Once you clean up your credit report, and you have built up credit lines by saving all of your receipts, you can start looking into buying a home of your own.

There are websites with a lot of information about credit reports and creditors. They even have sample letters you can use to send to them.

The links above are websites that contained free information at one time. If they now charge for any of it, contact me let me know. The ads claiming free credit help and free credit reports, are usually anything but free.