Last week, we talked about the three steps that a first-time home buyer might want to take to begin the process of finding a home. My suggestions were to obtain a copy of your credit report, get prequalified for a home loan and attend a non-credit course in home buying at a local college.

Here are some questions that are frequently asked by first-time buyers:

Q: Why is my past credit experience so important in the home-buying process?

A: Because home lenders rely heavily on your credit score in determining whether or not you will qualify for a new home loan, and if you have had slow payments or charge-offs in the past, these will lower your credit score.

Q: Why can't I just get my credit score directly from the three credit bureaus? Why do I have to examine my full credit report carefully?

A: Your three-digit credit score is calculated by computer programs that look at only the information in your credit report. No other data is considered by the computers in determining your score. Because so many consumers have similar names and addresses, the credit bureaus can sometimes mistakenly place information from another person's file in your credit report. If that information is negative, it can have a powerful impact, causing your score to be much lower. This might prevent you from obtaining the loan you need.

By the way, you certainly can obtain your numerical score from each of the three national reporting bureaus, but each now charges a fee. Both MyFICO.com and TransUnion.com offer a "three-score" package for about $40, but you can obtain your reports for free at annualcreditreport.com.

Q: What if I disagree with some of the information on my credit report?

A: Each of the three bureaus provides a way for you to dispute or explain any of the data listed on your report. The bureau is required by law to investigate your dispute and report its findings to you. If you still disagree, you may enter a statement of dispute in your file.

Q: How can I find out what factors go into the process of determining my credit score?

A: The best discussion I have seen anywhere is available free at MyFICO.com.

Q: Exactly what is involved in getting prequalified for a home loan? Is there any cost involved? What do I get?

A: A prequalification meeting is an informal discussion between you and a loan officer in which the lender makes a nonbinding estimate of how much of a loan you might qualify for based on the verbal information you have provided. You have no obligation to use that lender, and they have made no promise of approval to you. However, it is extremely helpful for you to get prequalified for two reasons.

First, you will hopefully get a rough idea of the loan amount you might be able to qualify for once you do find a house you like. And second, the lender will likely pull all three credit scores for you, giving you access to the actual numeric scores. If there are serious problems on your credit report, you will find out directly from this lender.

In addition, by meeting and talking with a loan officer, you will learn what it's like to answer a large number of intrusive questions. Get used to it, because it's just part of the loan application process. I do not recommend paying any fee in advance for any pre-purchase counseling, because you have no way of knowing that the first lender you speak with will be competitive when the house you wish to purchase is found.

Q: What is the difference between getting prequalified and getting pre-approved?

A: Getting pre-approved means the lender will complete a formal application and will issue a written statement that you are approved for a certain dollar amount. This process typically takes at least a week and costs as much as 1 percent of the amount being borrowed.