Forget what you've been told about credit. Qualifying for a real estate purchase requires different credit than automobile financing or retail credit.

You may be shocked at some of these tips because this information runs contrary to what other so-called credit experts tell you.

Common Credit Myths

1. You need to pay off your credit cards

2. You need to close credit accounts

3. You need perfect or good credit to buy a house

Credit Facts

1. Paying off your credit cards lowers your credit score

2. Closing credit accounts lowers your credit score

3. You don't need perfect credit to buy real estate

Why not pay off credit cards? Because paid-off credit cards do not compute in your credit score. Real estate lenders like to see open, active accounts with low balances.

Why not close accounts? Closing accounts before the payoff often costs consumers more money because credit card companies raise interest on closed accounts.

You can buy real estate with poor credit, but you will save thousands in loan costs if you maintain good credit. A bad credit report leaves home buyers with non-prime loans which have higher point charges, prepayment penalties, and higher interest charges, which therefore cost more money. For instance, a mortgage loan of $150,000, 30-year, fixed-rate mortgage, interest rate of about 5.72 percent costs around $870 a month; poor credit

About the Author: Jeanette Fisher, author of Credit Help! Get the Credit You Need to Buy Real Estate, Doghouse to Dollhouse for Dollars and other books, teaches Real Estate Investing and Design Psychology. For more credit articles, tips, reports, and newsletters, see http://www.recredithelp.com