Steve Rhode
Gannett News Service

Question: I am a young graduate and I'd like to buy a home in the not-too-distant future. I have a fairly good credit history with just a few run-ins when I was in college. Do you think I'll be able to get a home? I have a good steady job and have a paid-off car.

Answer: Buying a house with marks on your credit is possible. The key is to establishing positive references on your credit report: a major credit card, paid on time, is an excellent one. If you wait to buy a house until you have money to make a larger down payment, it may be easier for you to get a loan.

In the meantime, some of the older, negative credit information on your credit report may be deleted and positive information will be added. You also can apply for the loan with someone who has excellent credit, perhaps a relative.

There are several types of loans available to those who do not have exceptional or "A" credit ratings. Some mortgage lenders offer loans called "B" and "C" loans, for people with some negative information on their credit report. For those with very bad credit histories, some lenders offer "D" loans. Generally, the worse your credit score is, the higher the interest rate you will be charged. Every lender has different standards, so if one turns you down, keep trying.

Question: I would like to know if anyone has any knowledge about refund tracers, where an individual finds a refund owed to a homeowner who foreclosed on a house through HUD or FHA. The refund tracer gets a percentage of the refund from the owner of the home. There are several online businesses trying to attract customers to this business. Are these scams or are they legitimate?

Answer: The Department of Housing and Urban Development (HUD) has issued several warnings about these types of companies. From a consumer standpoint, HUD says you do not need a refund tracer to find out if you are eligible for a refund. You can find out directly from HUD. As for this business opportunity, HUD warns about possible misrepresentations, including earnings claims as well as companies that claim affiliation or endorsement by HUD.

To find out for free if you are eligible for a refund from HUD, visit its Web site or call (800) 697-6967.

Tip: Don't apply for too many loans or credit cards in a short period of time. Each time you submit an application, your credit report will be reviewed, creating an "inquiry" on your report. More than four or five inquiries within the last six months may count against you, depending on each lender's policy.

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Send questions or comments to questions@SteveRhode.com. Steve Rhode is a money coach, president of Steve Rhode Inc. and co-founder of the nonprofit consumer education group www.Myvesta.org.