Besides analyzing your income and expenses, lenders determine your ability to handle debt by scrutinizing your prior credit history. Lenders will request information about you from a credit bureau to help establish your credit rating.
You can access a free credit report annually from each of the three major credit reporting agencies (Experian, TransUnion, Equifax) so you can keep tabs on your credit and take care of potential problems that could impact your ability to qualify for a mortgage.
Your best bet: Obtain your credit report before you begin the application process. Once you get it, take some time to give it a close look. The responsibility to make sure the information is correct is yours, not that of the bureau.
Checking Your Credit Rating
The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies—Equifax, Experian, and TransUnion (see below)—to provide you with a free copy of your credit report, at your request, once every 12 months. But there's only one online source authorized to do so. That's annualcreditreport.com. Beware of other sites that may look and sound similar. Also, if you've been denied credit in the past 60 days, you are entitled to receive a credit report free of charge.
Order your credit report several months before you plan on applying for your mortgage loan. Your best bet is to check with all three major credit bureaus. Here's where to go for each:
Experian 1-888-397-3742 www.experian.com
Equifax 1-800-525-6285 www.equifax.com
TransUnion 1-800-916-8800 www.transunion.com
What do you do if you find an error on your credit report? Each agency has steps you can take to fix the error. Requesting a dispute online has become a fast and easy way to handle errors on your credit report. For many people, the process may take up to 30 days.
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