Good Credit, Bad Credit - Where Do You Start?

by Debbie Wilson
Loan Page Columnist

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If you're looking to obtain a new home loan, chances are pretty good that potential mortgage lenders will be reviewing your credit. And positive or negative, a credit report can have a big impact on your future, especially when it comes to buying a new home. Knowing what is in your report and, more importantly, knowing what it all means, can go a long way in helping you find a mortgage.


What Is A Credit Report?

A credit report is basically a record of your past and current credit activities. And while this may include a wide variety of data, there are usually four types of information in the report: personal identifying information, credit history, public records, and report inquiries.
  • » Personal Identifying Information - This includes your name, address (current and previous), social security number, telephone number, birth date, and employers.
  • » Credit History - This section deals with any accounts you have with banks, retailers, credit-card issuers, utility companies, and other lenders such as mortgages, student loans, revolving credit, installment loans, etc.
  • » Public Records - This includes information that affects your credit worthiness, such as tax liens, court judgments, and bankruptcies.
  • » Report Inquiries - This section lists anyone who has requested a copy of your credit report, including potential employers, within the past 1-2 years.

What Affects My Credit Report?

There are many daily activities that affect your credit report. However, when applying for a new home loan, it is important to review the following items in detail. How many inquiries on your credit report have you had within the past year? How many open credit accounts do you have? Have you missed or made late payments on any of your credit accounts? Do you have maxed-out credit lines? And finally, what is your debt to income ratio?

You can obtain a free copy of your credit report once every 12 months from a nationwide consumer reporting company. Once you receive it, take caution to review its contents for accuracy. Keeping an eye on your credit will help you to be prepared for obtaining the perfect mortgage for you new home.

About the Author

Debbie Wilson owns and operates a lakeside resort, managing all aspects of operations, including marketing and promotion. Debbie holds a B.A. in Business Management with a minor in Physical Education.

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