The first booklet is called "Knowing And Understanding Your Credit," and it gives the reader a basic introduction to credit. Here are some questions that first time buyers often have after learning about the relationship between good credit and qualifying for a home loan:

Q: Last week, you described credit scores as "all-important." Why?

A: Most first time buyers need a long term loan in order to purchase a house. And lenders need to feel certain that the borrower will pay the money back on time every month.

Lenders believe the best way to know if you will pay back money as agreed is to look at all the facts in your credit history. However, there are often too many individual bits of information for anyone to think about all at one time.

So a company called "Fair Isaac" developed a computer model that looks at all the facts in your credit file, then calculates a three-digit number based on how you have handled credit in the past. Because of its accuracy in predicting future behavior and because it takes human prejudices out of the loan approval process, lenders have come to rely heavily on your credit score in approving your home loan.

Q: Is my credit score more important than my credit report?

A: Your credit score is derived from all the information contained in your credit report, so they are equally important. If your report shows that you regularly pay your bills on time and use credit wisely, your score will be higher. But if you often miss payments or keep your credit cards maxed out, your score will be lower.

Applicants with lower scores pay higher interest rates and fees on the loans they are offered by lenders. And if your score is extremely low, the home lender may not be able to offer you any type of home financing until your score improves.

Q: Last week, you told me how to get a free copy of my credit report. Will that include my calculated credit score?

A: It depends on the policy of the individual credit repository you contact. When I recently ordered a free copy of all my credit files, TransUnion provided my score along with the free report, while Equifax and Experian offered to provide the score for a fee.

Perhaps the best way to be sure of your credit score is to actually apply for a home loan at a home lender. The loan counselor will access all three credit reports and scores, and will share the scores with you if you ask. Some lenders may charge a small fee for this process, while others may do this for free. Be sure to ask ahead of time if there is any cost.

Q: Can you give me specific examples of how missing a payment will affect my score?

A: No. The company which owns the computer model is extremely secretive about the exact result on your score of any specific action. However, they have provided some examples which give us a general idea.

In educational materials from Fair Isaac, one example shows a divorced couple with four credit cards, two of which are maxed out. They miss just one monthly payment on two of the cards, and the credit score of the responsible person drops from 700 to 600 immediately. While it might be relatively easy to buy a home with a score of 700, a score of 600 would make it difficult to qualify.

In another example, a couple with excellent credit buys a motor home and takes on new debt for the purchase, resulting in a 20-point drop in their score from 740 to 720. Because their new score is still considered good, the score drop has no impact on their ability to obtain credit.

Q: What if I don’t have any credit? I recently finished school and have never had any credit cards.

A: It is still possible that you have an established credit history.

For example, if you have ever had a cellular phone account in your own name, you probably have a credit history. Or if you have ever opened a checking account or a savings account, or if you even applied for a payment account at a department store or furniture store, you likely have a credit history.

And even if you have no formal credit history, lenders today are able to accept non-traditional forms of credit as evidence of your ability to pay as agreed. For example, if you have paid your water bill or your electric bill on time for a number of months, that would be helpful to your lender in getting your loan approved.