Make Your Credit Report Impeccable and Be Introduced to the Most Favorable Mortgage Rates Share this post Posted on October 2, 2013 Once you’ve made the decision to apply for a home loan, your credit rating will become a matter of immense interest to your lender. That is because it is used to determine your eligibility for receiving a loan. Your loan officer would pull up your credit report to look for anything that may be a cause for concern. Things like mistakes with dates, large purchases, or items that increase your debt to income ratio by a high amount are definitely things that you don’t want on your report, as they can affect your mortgage rates . Here is what you need to do to your report before applying for a loan: First, you need to get your credit reports in front of you. You can download them from the three major bureaus: Equifax, Experian, and Trans Union. As soon as you’ve got your reports, you need to go over them very thoroughly and mark any mistakes that you find. Each report will reflect slightly different information, so be sure to take your time with each one. You will need to get these errors corrected before you apply for a loan. Some errors you might find: • Short sales and foreclosures that are listed incorrectly • Payments that show up as late but were paid on time • Credit limits and credit balances that are listed incorrectly • Inquiries and public records listed incorrectly • Negative comments and reviews that should be contested You need to be careful with how things have been documented on your reports, because some people have found that they had short sales listed as foreclosures on their reports. Because foreclosures have a greater negative impact on your credit than short sales do, you want to make sure you get errors like this fixed prior to getting your home loan. Make sure all the dates are correct in recorded payments. If any of your payments have been marked as late, but you can prove they were made on time, get those corrected. Once you’ve corrected all of your payments, read through your comments and reviews. If anything seems incorrect or disparaging to your report, take the necessary steps to have them edited or removed altogether. Anything on your report over seven years old needs to be removed. The one exception to this rule is bankruptcies. It’s fairly common to find errors on your credit report, so don’t be too upset if you find several that may take some time to get corrected. You can stay on top of this by checking your reports on a regular basis and handling mistakes on your report as soon as they appear. But you definitely need to be vigilant about this, because errors can really add up and count against you when it comes to getting approved and these again can impact the mortgage rates that you may be offered. In the process of correcting mistakes, every bureau will have a different system in place for resolving errors. But most of the time it’s as simple as filling out an online form and submitting that. After you’ve submitted a request for an error to be removed, the bureau will alert the appropriate creditor, and then the creditor will have 30 days to get back to you. If you don’t hear back within the 30 days, the error will be removed. If the creditor disagrees with you, you will have to fill out a Consumer Statement that explains the error in more detail. Again the creditor has 30 days to respond, and if they don’t, the mistake will be automatically removed.
Posted on: Tue, 08 Oct 2013 18:52:00 +0000
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