rightYour credit and buying a home

The information in your credit report has a huge impact on whether or not you qualify for a mortgage loan and what interest rate a lender will offer. Therefore, its important your credit report reflects a positive image of the way you manage your money. If you're getting ready to buy a home, checking your credit report is the best way to ensure you get the loan and interest rate you deserve.

The easiest way to see whats in your credit report is to contact the three national credit reporting agencies Equifax www.equifax.com,
Experian www.experian.com and TransUnion www.transunion.com - and request a copy from each. Thats because the three agencies are independent of each other and the information may differ on all three reports. In addition, you may not know which agency your lender will use to check your credit, so its best to verify that all three have correct information about your credit history. Please realize however, that your lender or broker will need to pull their own report and scores sometimes differ from bank reports to consumer reports. The lender making the loan will use their own report.  A qualified lender or broker will be able to run your credit (costs approx $25) and pull all 3 reports into one.  They will often provide you with a copy and make suggestions of things that can be improved to help you qualify for a better mortgage.  This is a key step in the process and should happen BEFORE you begin visiting properties.  After all, what good is it to waste time finding the home of your dreams, only to find out you can't get the mortgage you need to buy it.  This is why most realtors will insist upon a preapproval (or at least prequalification) before showing you homes. 

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If you've been denied credit, insurance, or employment because of information in your credit report from any of the three agencies, you can obtain a free credit report by contacting the agency within 60 days of receiving a denial notice. In addition, you're entitled to a free copy of your report each year when you certify in writing that (1) you're unemployed and looking for a job within 60 days, (2) you're currently on welfare, or (3) your report contains errors due to fraud. Otherwise, the agencies charge a fee for a copy of your report.

For additional fees, each agency may offer you different report variations, such as:

  • A credit report with or without your credit score.
  • A three-in-one credit report that lets you see a side-by-side comparison of records, from all three agencies, with or without scores.
  • Notification services when your credit history is requested.
  • Routine notification changes to your file.
  • Subscriptions that allow you to access your report on a regular basis.

New law promotes free access to credit reportsleft
Soon you'll be able to get your credit report for free regardless of your employment or financial situation. A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each agency provide you with a free copy of your credit report, at your request, once every year, from www.annualcreditreport.com. 

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Free reports will be phased in during a nine-month period, rolling from the West Coast to the East beginning December 1, 2004. By September 1, 2005, free reports will be accessible to all consumers.

Here is a breakdown of eligibility for a free credit report:

Beginning December 1, 2004 - Consumers in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming

Beginning March 1, 2005 - Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin

Beginning June 1, 2005 - Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas

Beginning September 1, 2005 - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia the District of Columbia, Puerto Rico, and all U.S. territories.

Whether you are thinking of buying a home or simply curious about whats in your credit report,  its important to correct any errors you discover as soon as possible.  You dont want errors in your credit report  affecting your eligibility for credit in the future. 

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