When you loan someone money, it's only because you expect to be paid back. Your only assurance that will happen is that person's word. The same expectation holds true for financial institutions who qualify you for a mortgage. But they need more tangible proof of your ability to pay, which they can get through your credit report. To find out what lenders are learning about your finances, you can view these documents.
The One No Obligation Stop to Get Your Free Credit Reports
By law, each of the major credit bureaus (Equifax, Experian, and TransUnion) must grant you one report for free every year. Beware of websites that claim to offer you the same privilege at no cost. In exchange for your receiving the document, they sign you up for paid credit reporting and monitoring services. The only site where you can download your report without any obligation is AnnualCreditReport.com.
Got them, Now What?
When you receive your credit report, look for errors. Examine the creditor names and addresses, credit amounts, transactions, payment terms and due dates, and the amounts you paid. If charges or accounts appear that you don't recognize, someone may be fraudulently using your credit information. Whatever errors you discover, report them immediately to the reporting merchant and the credit agency. They must try to remedy the situation. The fix may take some time to implement, which is why we recommend you check your report several months to a year before applying for a mortgage.
If your report contains missed or late payments, bankruptcies, or foreclosures, financial institutions may deny you a loan or make the terms more stringent. Unfortunately, you can do nothing about these negative listings. They will drop off of your document after about seven years. Be prepared with good explanations of why they exist, in case potential lenders ask you about them.
If you want more information about how to prepare for real estate transaction, or if you want help with finding a home, please contact us.