Look At Your Credit Before Applying For A Mortgage

(Reviewing your credit report at least once a year is a very important part of any person’s financial health.)

It is also very important if you are looking to obtain a home or car loan, since the information found in your credit report will determine whether or not you are approved for most loans.

But consumers must realize that there is a difference between the credit report and the credit score.

A credit report lists all of your open accounts, payment history, etc. Your credit score is the three digit number that lenders look at to determine the risk of lending money to you. But looking at your credit report will help you to catch any mistakes or errors that may be on there that could lower your credit score.

A November 21, 2006 article by Lew Sichelman of The Wall Street Journal, “How to check your credit before applying for a mortgage,” discusses the steps a potential homeowner should take to get a look at their credit.

What many people do not realize is that they are entitled to only one free credit report a year. There are three major credit reporting bureaus and you can obtain one free report from each company per year:

“Equifax Information Services, P.O. Box 740241, Atlanta, Ga. 30374, 800-685-1111, www.equifax.com. Experian, P.O. Box 2104, Allen, Texas 75013, 888-397-3642, www.experian.com. TransUnion Corp., P.O. Box 390, Springfield, Pa. 19064, 800-916-8800, www.transunion.com.”

“A credit report is a sort of fiscal fitness statement of your credit habits. It names your credit accounts, identifies them by type and tracks balances, credit limits, payments, available credit, open-or-closed status and other information that reveals how well or how poorly you pay each account. The report also documents credit requests and notices of liens, judgments and other ‘derogatory’ remarks, remarks from the consumer, and other information.”

There is one and only one website to go to get a copy of your credit report from all three credit bureaus at one time.

This website is www.AnnualCreditReport.com. Beware of any other websites that offer you a look at your report for free, because they will be scams.

“But beware of ‘impostor’ Web sites that pose as ‘free credit report’ Web sites but which are questionable marketing gimmicks designed to enroll you in credit-report monitoring and other credit services in exchange for granting you your ‘free’ credit report.”

It is important to look at your credit before you apply for a loan so you do not get any surprises when the lender pulls your credit themselves. This also gives you ample time to fix any mistakes that you may find on your report.

“When you apply for a mortgage or other credit, the creditor takes a look at your credit report, among other documents and data, to determine if you qualify for credit and to determine how much credit it will grant you. Consequently, it's a good idea to keep tabs on your credit report so you can correct any mistakes that could adversely affect your application, and to take steps to improve your credit whenever possible. An unblemished credit report not only gives you fast access to credit, you also pay less in interest than you would if your report contains blemishes.”

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