At the same time you’re looking for a lender who will finance your home with your bad credit, you’ll also want to move towards improving your credit so that in the future, you can qualify for lower interest rates and more favorable terms.

There are hundreds of credit repair agencies that claim to be able to repair your credit within a matter of a month or two. That’s impossible, true credit repair is a time-consuming process, but you should be able to see real, lasting results in six months, and experience a real turn-around in a year.

Job stability is a big part of the credit score, so if it’s possible, try to avoid moving from job to job. By all means, if you get an offer that pays double your current salary, take it--but avoid job moves that provide little incremental benefit. On the subject of stability, how long you have been in your current residence, and how long you have been in the general area are also important to the lender. Avoid moving from place to place, and make sure the utilities and phone are in your name.

Make sure you establish some positive credit references, even if it is only a secured credit card with a low limit. Try to establish a savings goal and stick to it, and of course, budget your money at all times and don’t make extravagant purchases. Your mortgage lender won’t look favorably on you if you just bought an expensive new sports car, although buying a reasonably priced second hand car is usually a good way to establish a good credit reference.

Obtain a copy of your credit report periodically, and review it for accuracy. Dispute any erroneous information, and make note of your progress over time.

Lastly, and this is an item often overlooked, be sure to maintain a good banking relationship, even if it is just a simple checking account and a savings account with a small balance. It doesn’t matter that you aren’t planning to get your mortgage from the same bank you have your checking account. Your lender will probably want to see bank statements, and there can’t be any overdrafts in there.