Here’s a guide to understanding your credit.
Understanding Your Credit
Debt is a way of life for many of us. As a matter of fact,installment payments and credit cards can be useful financial tools. However, if not controlled, your credit can eventually control you. To qualify for a mortgage, your credit does not have to be spotless. However, your credit history must demonstrate that you are willing to pay your debts.
Your Credit Report
When applying for a mortgage, your lender will look at your credit report. They do this to learn if you have been paying your debts. If you want to see your credit report, it can be obtained for free once per year from the 3 major credit bureaus. In addition, there are numerous sites online where you can get a copy. The credit reporting agencies track your payment records on loans, credit cards and other debts. It’s a good idea, before applying for a loan, to check your own credit report.
Look carefully for any past due amounts or “charge-offs”, which means a bill was never paid once you get your credit report. After all, you may not qualify for a mortgage if you have poor credit. Furthermore, poor credit might mean you’ll pay a higher interest rate. Verify that the information reported about you is correct. You can contact the credit bureaus to contest the reports if you see any discrepancies.
There are many companies that will repair your credit – for a fee. Buyer Beware, some of theses companies are legitimate. However, others are not.
When you’re ready to either buy or sell a home, contact us.