You want to buy a home. You have heard that it is a great time to purchase. But, how do you begin the process? The process begins with you. You must have the credit to qualify for a home loan.
Borrowers and prospective home buyers are always curious about the relationship between a credit score (FICO score) and the mortgage rate you obtain when purchasing a property.
It is advisable for prospective buyers to check their credit score long before applying for a mortgage. This definitely isn’t something that you want to ignore. Consumers and prospective home buyers need to take a good look at that report, combing over each line for errors (both big and small).
Surprisingly, almost eighty percent of credit reports have either serious errors or other types of mistakes, according to a survey conducted by U.S. PIRG, the national organization of state Public Interest Research Groups.
Even more surprising is that 25 percent of the reports surveyed had errors significant enough to keep borrowers from obtaining a home loan. This means that one in four people had an error on their credit report that may have impacted their ability to qualify for a home loan!
All consumers are entitled to one free credit report each year. You can request your credit report by clicking here. Once you receive the report, examine it with a fine tooth comb. Check accounts, dates, addresses, and delinquencies.
If you do find an error, notify the consumer reporting company in writing. Gather any documents to support your claim. The consumer reporting companies are required to investigate the claim and typically do so within 30 days. If you need additional support, the Federal Trade Commission has a great website that provides you with many tips and tools for dealing with errors in credit reporting.
Once you have ascertained that your credit score accurately represents you and your buying power, it’s time to contact a Realtor®. This individual can put you in touch with a qualified mortgage lender who can help you to obtain a loan and purchase your first home!
