You’ve found your dream home. You’ve saved a deposit. All you need to do now is find a lender that will finance your new purchase. But then you remember those pesky phone bills from a few years ago that you forgot to pay while you were overseas, not to mention the credit card debt you’ve just racked up buying a new 3D TV.

If you’re worried about being knocked back by a lender the most important thing to remember is that a lender’s business revolves around lending people money. They’re looking to see why they would approve an application, not decline one.

However, in order to manage their risk, lenders need to make sure your application demonstrates that you will:

1. Meet the required loan repayments
2. Buy a property that is valued as an ‘acceptable risk’ to the lender

One of the first stumbling blocks many potential borrowers face is their credit score. Almost every lender will process your home loan application by loading your information into a credit scoring system when it is first received. If your score passes a pre-determined level you will more than likely be ‘conditionally’ approved, subject to property valuation.

If you’re knocked back at this point it means you have something nasty on your credit report. According to credit reporting leader Dun & Bradstreet one in three Australians pay their bills late, a habit that has the potential to negatively impact their credit rating for up to five years. D&B suggests consumers familiarise themselves with their credit rating before considering any big purchases.

"Consumers need to put themselves in a position to understand what information is listed on their credit record and act appropriately to manage their credit commitments. Failure to do so could result in an inability to access credit in the future or to high interest costs due to a poor credit history," it says.

If you’re worried about your credit history, you can use services providers like D&B to check your credit history free of charge. Reports are provided within 10 days, or alternatively you can pay a nominal fee for instant online access.

Having a broker can also help you organise the documents you need, and suggest a suitable loan for you. Using a mortgage broker is free  – they’re paid a commission by the lender when you settle on a loan – and they can substantially speed up your application process through using their expert knowledge and industry experience.