Credit Report Blues
Today more than ever, having acceptable credit is essential for obtaining a home mortgage. It is quite common for credit reports to contain inaccurate information or items belonging to individuals with similar names. So, it's wise to review your credit report once a year.
Credit reports are produced with three main purposes:
1. Your credit report gives a profile of your bill paying habits--whether you pay on time, in 30 days, 60 days, 90 days, or flat out never pay your debt.
2. Your report indicates whether you have any outstanding collection items. A collection note appears on your report when traditional methods of receiving payment for your debts have failed and your account has been turned over to a collection agency. If a collection agency takes legal action, a judgement can be filed against you.
3. Your credit report details items from public records. If a judgement, divorce, or other type of court action is filed, information is entered into your credit report indicating that a debt is owed to another party.
Since negative items on your credit report can keep you from receiving a loan, checking the status of your credit report is an important first step in the home buying process. If your credit needs a little cleaning up, your lender can assist you.
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