If you think you’re ready to buy a home, whether you already own one or this will be your leap from renting to owning, you’re going to want to check your credit score. Your credit is one of the most important factors in a lender’s decision, and it can affect your ability to borrow (get a mortgage) and the interest rates that a lender is willing to give you. Your credit score can mean the difference between 6 percent interest and 3 percent interest on a 30-year loan (and that difference really adds up).
Getting a Free Copy of Your Credit Report
Before you apply for a mortgage loan, get a free copy of your credit report. Thanks to the Federal Trade Commission, we’re all entitled to one free copy each year. You can get yours from AnnualCreditReport.com.
What to Look for on Your Credit Report
When you receive your credit reports, comb through every detail and look for errors. The three credit reporting bureaus—Equifax, TransUnion, and Experian—all report differently, so what shows up from one reporting bureau may not show up for another. If you find an error, report it to the bureau immediately and explain the situation; they may be able to correct it for you and improve your credit score as a result.
Once you’ve had errors corrected and you’re sure your credit score is correct, you can begin applying for mortgage preapproval.
ARE YOU BUYING A HOME ALONG 30A?