Where To Begin
Checking Credit
Research Before Choosing A Neighborhood
Check the Zoning
New Home Or Resale?
Think You Don't Need Flood Insurance?
Used Homes
Do I Need Title Insurance?
Be Alert For Sellers’ Tricks
Recruiting The Experts
Choosing A Real Estate Agent
The Foreclosure Market
Buying? Think Selling!
ALWAYS—ALWAYS Hire a Home Inspector
Be Your Own Inspector
Partnership Purchases
Condominiums
Financing Tips
Can't Afford A Down Payment?
Negotiating Tips
10 Tips For Winning A Bidding War
Homebuying Checklist
Home Warranty Tips
Can You Afford the Home You Want?
Green Building Tips

BUYERS' CORNER

Checking Credit

Your credit report, as maintained by the three major credit bureaus, is a brief snapshot of your financial status, and list those business, banks, credit cards, etc., that have granted you credit in your recent past. It also records the timeliness with which you've repaid those obligations. Potential lenders will review your credit history to see how you have handled credit in the past. The credit report is your key to securing a mortgage at favorable interest rate. Unfortunately for all of us, mistakes frequently occur in those reports, and are sometimes sufficiently negative to dramatically alter your ability to get a loan.

It's a good idea to check your report regularly, and especially a few months prior to applying for a mortgage, for it sometimes takes months to resolve errors in your credit report. Mortgage lenders use the information in your report as well as your credit score to determine whether or not they will grant a loan and at what interest rate the loan will be. The credit score they use is called the FICO® score, provided by the Fair Isaac Corporation. Yours should be in the high 700's in order to get the best interest rate. If it's not, it is possible to raise your score by following the tips provided with credit reports. But, don't try one of the companies that promotes being able to raise scores. Most of what they offer is expensive, provides little help, and is sometimes illegal.

The FICO® score is the one used by lenders. Other credit scores offered by the credit bureaus will not reflect the same number. Don't waste your money paying for one. You'll be offered an opportunity to pay for your FICO® score when you request your free credit report, and can get the real thing then.

The credit bureaus are required to furnish a free credit report-you'll have to pay extra for the FICO score-once a year, and if it's been less than a year since your last free report, you should purchase one from all three companies prior to applying for a mortgage.

It's easy to go online for your free credit reports. The web address is: www.annualcreditreport.com. This is the only address for the mandated free reports. Don't be confused by other "free" offers. They are all selling something. To request your free reports by phone, call: 877/322-8228.

The three major credit bureaus are:

Equifax
P.O. Box 740123
Atlanta, GA 30374
800/685-1111
www.credit.equifax.com

Experian
475 Anton Blvd.
Costa Mesa, CA 92626
888/397-3742
www.experian.com

Trans Union
P.O. Box 7000
North Olmstead, OH 44070
800/916-8800
www.truecredit.com

 

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