Monthly Archives: November 2012
Posted by Trudy Edwards
It is a good idea to check your credit before meeting with a loan officer and before you start shopping for your dream home.
As part of the loan application process, the bank or mortgage company will check your credit worthiness before lending you money to buy that home. They want to see that you have a good record of paying your bills on time. A good credit history and a high credit score shows the lender that you are responsible and can be trusted to repay the debt.
You can check your credit by ordering a copy of your credit report and credit score so that you can see where you stand. By reviewing your credit report you can see if there are any errors such as debts or judgements that have already been paid off and not reported as paid as agreed. You will be able to see if there are accounts that have been closed, credit lines have been reduced or if there are any suspicious entries or enquiries on your report.
You can order a free copy of your credit report from each of the three main credit reporting agencies – Equifax, Experian and Transunion, through AnnualCreditReport.com. If you want to check your credit score you will need to pay a small fee to order your credit score. You can purchase your credit score at the same time you order your credit report. Each credit reporting agency may calculate a different score for you, based on the data they have and the metrics they use, so you may want to order your credit score from each agency. You may be offered a discount for purchasing all three at the same time.
If there are incorrect items on your credit report you should contact the credit reporting agency where the error is reflected and ask them to investigate the item.
The strength of your credit history and credit score can make a difference in how much credit a lender will extend to you, what kind of financing options are available to you and what kind of interest rate is available to you.
Your credit report may show that your proportion of balances to total credit lines is high. In which case, you may want to take action to pay down those outstanding balances and limit new borrowing to improve those ratios. Alternatively, you may not have enough of an established credit history. Lenders want to see a good credit history that shows that you can responsibly manage credit.
If you can take the time to check your credit report for accuracy, report any errors to the credit reporting agencies to be investigated and take steps to improving your credit score, those steps may well save you thousands of dollars over the life of your loan.