Check Your Credit Before Shopping For That Home Loan

Review Your Credit Score.

Nearly every bank, credit union, and mortgage lender relies on a three digit score provided by one of the three major credit bureaus to help them make lending decisions. A credit score can range from the perfect 850 all the way down to the abysmal 300. Scores under 720 may not qualify for the best interest rates, so you should check your credit scores with all three bureaus before shopping for a loan. You may discover you have some cleaning up to do before you can take advantage of a great loan deal.

Scan Your Report for Mistakes.

Though some consumers struggle with debt, many more would-be borrowers suffer needlessly because of mistakes they made in the past or mistakes that credit bureau systems made when compiling their reports. To avoid embarrassment and wasted time during the loan origination process, you should review your report carefully before you start shopping for loans. Dispute any inaccuracies both with the credit bureau and with the creditor using certified mail. If you find any long-lost bills you left unpaid, pay them. A bill as insignificant as $100 can actually stall or derail the closing process, costing you the chance to buy your dream home.

Avoid Credit Applications.

In the weeks leading up to your home purchase, you may consider switching banks or responding to attractive credit card offers. Resist the urge to earn those frequent flyer miles, because a flurry of applications can show up on your credit report simultaneously. Therefore, lenders may grow concerned about potential identity theft. Even worse, lenders might assume you've lost control of your spending, making you an unsuitable candidate for a home loan.

Do All Your Shopping on the Same Day.

For the same reasons, you should choose one day to make inquiries from your favorite mortgage lenders. A few weeks after your inquiries, your applications will show up on your report and drag down your score by a few points. Because the bureau assumes that every application may result in an approval, the amount of your potential debt load increases significantly. In addition, the market changes so frequently that quotes made on different days cannot be compared directly. Be prepared to make your phone calls, run the numbers, and accept a locked pre-approval all on the same day.

Kevin Adelsberg is a writer for FDLoans.com. For additional articles and an extensive resource for everything about loans, please visit us at http://www.FDLoans.com

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Credit Information:

Related Articles

Top 5 Credit Misconceptions
We have all heard the rumors?from neighbors, relatives or friends. There are a wide variety of myths floating around about what you should and shouldn't do to improve your credit reports and credit scores.
Credit Help For Renters And Others On The Horizon
Sue is a homeowner and pays her mortgage and other bills on time like a good credit consumer. Sue's on-time mortgage payments are reflected in her credit score profiled by the three major credit bureaus; Equifax, Experian and Trans Union.
Common Credit Score Myths
A lot of credit score myths about fico score ratings get spread around and some of them are just outdated information. Sometimes even lenders can give you the wrong advice and it can get confusing.
Your Credit Card May Be Costing More Than You Think!
Do you know what your credit card is truly costing you? Manypeople assume that they do, but aren't familiar with thehidden fees that many credit card companies are charging. Infact, if you don't keep close tabs on your credit card, youmay end up paying hundreds of extra dollars per year-withoutever really knowing it!And if you're trying to budget your money, those hidden feescan add up!Let's take a look at some of the most common credit cardfees, and then talk about how you can avoid them.
Credit Establishment 101
There will come a day when you need credit. You may want to buy a home or a car and your credit rating will become very important to help make these dreams come true.
Identity Theft - Guard Your Childrens Social Security Numbers
Identity theft is a growing concern among Americans, and rates among the top five complaints received by states' Attorney General's offices. A stolen identity can lead to tens of thousands of dollars worth of debt in the victim's name and it can take years to completely undo the damage done to the victim's credit report.
Credit Cards: Pros and Cons
Sure, there are a lot of problems with credit cards, but there are a lot of good things attached to them as well. For instance, if you have a small business, fleet credit cards can keep your books in order when you issue them to drivers of company vehicles for gas and automobile repairs.
What Are the Most Common Ways to Commit Identity Theft or Fraud?
It's the number one source of consumer complaints at the Federal Trade Commission (FTC), and unfortunately, it's one of the simplest crimes to commit. Identity theft involves information from your daily life, from shopping, bill-paying, and even applying for a job.
Is Your Credit Score Being Held Against You?
Credit Scores That HurtIs your credit score being held against you?More and more the staples of life depend on your credit score. Your mortgage, insurance premiums,employment opportunities and even your landlord may be using your credit score to determine yourfinancial future.
Dont Dig Your Own Pit
If you want to enjoy your life out of spending, enjoy if you have your own resources and money.But don't enjoy your life by becoming a debtor to somebody.
How Your Credit Rating Affects You, and How to Check It
You might not know it, but every time you take out any kind of loan or credit or pay something back, it gets counted on your credit rating. Who keeps a record on you will vary according to where you live, but the big three credit reference agencies are Experian, Equifax and Trans Union.
First Major Regulatory and Legislative Victory of 2005 for Creditors and Consumers
Under the Fair Debt Collection Practices Act, collectors are not allowed to disclose a consumers past due debt to anyone other than the debtor and in some cases a spouse. The Telephone Consumer Protection Act would have required collectors to identify the registered name of their business in any pre-recorded messages to consumers or debtors.
What You Need To Know About Credit Cards
What is a credit card? A credit card is a card that allows you to borrow money to pay for things. There will be a limit to how much you can spend called your credit limit.
3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days
In Less Than 30 Days. "What can you do to increase that set of three numbers on your credit report that can be so important with your financing?" I came across this question as I was surfing discussion groups the other day.
Borrowing on a Credit Card
One of the easiest ways to borrow money of a financial institute is to use a Credit Card, available from all banks, building societies, and other financial organisations. The choices available are enormous, with a wide variety of interest charges, annual charges, loyalty schemes, and bonus points available.
Useful Tips When Choosing Credit Cards
Chances are you have received your share of "pre-approved" credit card offers in the mail, some with low introductory rates and other perks. Many of these solicitations urge you to accept "before the offer expires.
Free Credit Report - Watch Out for Scams
Many people may still not be aware of an amendment to the Fair Credit Reporting Act (FCRA) that Congress passed last year. This amendment allows U.
Making Sense of the Information in Your Credit Report
If you've ever applied for a credit card or loan, you'veprobably had your credit report reviewed by the lender. Yourcredit report has a huge impact on your financial future, soit's well worth your time to be sure that you understand whatyour credit report says about you.
What Is A Credit Report?
Even if you have heard of a credit report, you may not know exactly what it is. If so, this credit report article is for you.
Choosing the Best Low Interest Credit Card
With so many low interest credit cards on offer, how do you know which one to choose? Here is a brief guide for choosing your low interest credit card.The Chase Manhattan MasterCard is a great choice, for those with an excellent credit rating.