Now that you are interested in purchasing a home of your own, it is also a good time to review your credit score via your credit report, checking it closely for correctness. If you are married, you and your spouse will have separate credit files that contain much of the same information.
You will need to have a good credit rating to buy a home, but it does not have to be perfect.
There are different ways credit scores can affect a mortgage. The type of loan and amount of down payment will dictate what your credit score (FICO Score) needs to be.
Your credit rating is the history of money you have borrowed and repaid. There are 40 FICO score reporting models, and it is important to note Mortgage FICO Scores are not the same as credit scores used for a car loan.
A mortgage lender’s decision to approve a loan application is primarily based on credit, so it’s important to have a good credit rating. If you have not borrowed and repaid money, you will not have a credit history rating at all.
You may be able to show your ability to make timely payments using nontraditional credit references like rent, utilities, childcare, child support and other large recurring payments to show the lender that you make your payments on time.
A credit report is a current and historical record of your credit activities and employment. It also shows action taken against you because of unpaid accounts, bankruptcy, judgments, liens filed against you plus former addresses and employers.
Here are the 3 major credit score bureaus that lenders pay to obtain your credit information.
You too can obtain a copy of your credit report. Visit www.AnnualCreditReport.com for information on how to obtain a free copy.
Mainly this is to avoid surprises.
Errors on credit reports are not uncommon and they can be corrected by contacting the creditor. You can save time by reviewing your credit report for accuracy before you apply for a mortgage loan.
If you have a poor credit history, consider contacting our favorite credit repair company CreditSecurityGroup.com. No one can unconditionally guarantee to clean up your credit and that you will qualify for a loan.
Under the Fair Credit Reporting Act, credit repair companies cannot do anything that you cannot do for yourself at little or no cost. Although errors on your credit report can be corrected, a poor credit history cannot be erased. It is understanding how to help yourself and your credit that is important.
Your credit report can be improved over time by doing the following:
One of our credit repair partners thought it would be helpful to provide you with a list of things to avoid when trying to improve your credit scores. It is usually beneficial to try to avoid doing any of these 5 things:
If you have any questions please don't hesitate to contact us.