Q. My credit history is poor, to say the least. I have a bankruptcy that was discharged in 2004 and shady credit regarding late student loan payments and a cell phone bill in collection. I have paid my $30,000 student loan for the last three years without fault, but my $400 cell phone bill has yet to be paid. I also pay my credit card on time. But my credit score is just 525. My current employer -- I've held my job for three years -- recently upped my income to a little over $100,000 a year. My question is, if I plan to buy a house ($350,000 to $450,000) in six to eight months, what are my chances and what are my best options?

A. We have several concerns about your plan to buy a house. First, you'll never get a mortgage with a credit score of 525. You've got to boost your credit score to at least 620 before you have a serious shot at a loan. Even then, you'll have to pay a higher interest rate than borrowers with good credit until you can boost your score to at least 700 or 720, depending on the lender.

Keeping up with your student loans and settling that old cell phone bill would be a good start. It's just $400 for heaven's sake. That bankruptcy will remain on your credit reports for seven years, and you'll need a spotless record of paying your bills, and paying them on time, to rebuild your credit score.

Our 7 smart moves to improve your credit score will tell you what to do.

Then you need to consider whether you can afford a $350,000 to $400,000 house on an income of $100,000 a year. Almost every yardstick we know of says you can't.

The old rule of thumb that you shouldn't borrow more than two-and-a-half times your income suggests a maximum mortgage of about $250,000.

If you've got $100,000 to $150,000 for a down payment, you're good. If not, you'll wind up with mortgage payments that will consume way too much of your income.

We see so many people struggling to meet their monthly payments these days. Don't become one of them.