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Buying a home? Make sure your credit is good

Thinking about catching mortgage rates while they are still low? First make sure your credit is in good shape, says Jean Chatzky.

Q: I heard that interest rates may go up after the presidential election, and I'm thinking about buying a home while credit costs are still low.  Do you have any advice?

A: As you start your house-hunting expedition, you'll simultaneously want to make sure that your credit rating is in tip-top share.

A poor credit rating can boost you from a reasonable interest rate into the stratosphere. In fact, you don't even want lenders looking into your credit files until you've given them a thorough going-over to make sure they're clean.

Here’s how to go about it:

Getting the reports: Order a copy of your report from one of the three credit reporting agencies. If you find errors, you'll want to see all three — believe me. In my single days, I was once mistaken for another Jean Sherman who had several liens against her property. I got turned down for a credit card as a result and spent hours fighting with the credit bureaus to get them to remove the faulty information.

Getting free reports: If you've been turned down for a loan or credit card because of something on your credit report, the agencies will provide you with a copy for free, as long as you contact them within 60 days.

Finding the bureaus: You can contact each of the three credit bureaus directly:

  • Equifax: or 1-800-997-2493
  • TransUnion: or 1-800-888-4213
  • Experian: or 1-800-397-3742.

You can get an instant look at a single credit report or all three at myFICO (). The fee for all three is $38.85.

Jean Chatzky’s Bottom Line
This week: Make sure you take that 401(k) match

My dad (like yours, probably) loved to say, "There's no such thing as a free lunch." He's right — with one exception: retirement-account matching dollars. If your employer is willing to match the money you pour into a 401(k), 403(b), or other retirement plan, you'd be turning your back on a very good thing if you don't take advantage of the offer.

What to do without a match. Even if you don't get matching dollars, it still makes good financial sense to take advantage of any government-sanctioned opportunities for money to grow tax-deferred until withdrawal (or in the case of the Roth IRA, tax-free). That means putting as much as you can into IRAs, Roth IRAs (where, in fact, the money is taxed before you put it in and not upon withdrawal), and for the self-employed SEPs, Keoghs, and SIMPLEs.

How to pull together the money. If each year around this time you're scratching your head wondering where you're going to come up with the money to put into these accounts, sign up for an automatic investment plan through a brokerage firm. That way, you won't have this problem next year.

Jean Chatzky is the financial editor for “Today,” editor-at-large at “Money” magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2004. For more information, go to her Web site, .