Understanding Your Credit Report: What does it Mean to Your New Home Loan?By Emily Kerr
Email a Friend Printer Friendly
What is a credit report?Your credit report is made up of information from companies you've had credit with, everything from credit cards to car loans. The information is assembled by a credit reporting company, who makes it available to companies you request credit from. When you're in the market for a mortgage, it's crucial you understand your credit report.
Your Credit Report, Your RightsYou have a right to a copy of your credit report and may request a free copy of any credit report used to deny you credit, provided you request it within 60 days of being denied. You also have the right to dispute any incorrect information you find in your credit report. Credit reporting agencies include Trans Union, Experian and Equifax.
You should check your credit report at least once a year to make sure it's accurate. When you're in the process of trying to secure a new home loan so you can buy a house, your credit report is crucial.
Your Credit Report, Your Mortgage - the ConnectionYour credit report determines whether or not a lender will approve your mortgage application and give you that new home loan. Credit report scores range from 300 to 850, the higher the better. Most lenders will approve you at the most favorable mortgage rates if your credit report score is 650 or above. Studies have shown that people with scores between 500 and 600 are significantly more likely to default on loans than people with scores above 650.
Before you head out to find the lender for your new home loan, you need to check your credit report through one of the credit reporting agencies and clean up any discrepancies. Give yourself six months, and make certain the information on your credit report is accurate, that your score is as high as you can make it, and that you don't have too many items on the report (too much credit can be reason to be turned down for that new home loan.) Then take your clean credit report and go apply for that mortgage.
Sources:What is a Credit Report?
About the AuthorEmily Kerr is a freelance writer with 425 articles in print. She writes about everything from home loans to home construction.
30-Year Fixed Rate -Get Mortgage Quotes In Your Area
15-Year Fixed Rate -Get Mortgage Quotes In Your Area