What You Should Know About Your Credit Report

What Your Credit Report Says About You

Overview

Your credit score is one of the most important factors in determining if and how you qualify for a mortgage. But if your credit isn’t perfect, you still have safe, secure loan options that don’t rely so heavily on your credit score, like FHA.

So who compiles your credit report? A credit bureau (also called a credit reporting agency) gathers, maintains, and sells information about your credit history. It collects information about your payment habits from banks, savings and loans, credit unions, finance companies, and retailers. That information is gathered into credit reports that are used by creditors and lenders.

What Information Is On My Credit Report?

Your credit report contains your credit history. It includes all of your loan and credit card accounts with specific account information, such as the date opened, credit limit or loan amount, balance, and monthly payment. It also includes late payments, bankruptcies, liens, and collection agency attempts to collect past due amounts.

What a Good Credit Score Means for Your Finances

It’s important to maintain a good credit history. A good credit history means a good credit score. A good credit score means you’re a “good risk” to lenders which makes you eligible for better mortgage rates. A poor credit history and/or score sends a message to lenders that you’re not a good risk which subjects you to higher rates. Higher rates mean higher payments. It’s also possible to be denied credit if the score is low enough.

It’s important to review your credit report. Financial experts advise to check your credit report once a year for inaccuracies. A 2004 Federal law now means that you can now receive a free copy of your credit report every year from each of the three major credit reporting agencies. You can also find a free copy of your credit report at www.transunion.com .   You can also call us and we can provide you a with a free credit analysis that will help you improve your score. Just answer a few questions about yourself and you’ll get a completely free report on how to improve your scores.

Less than Perfect Credit? You Still Have Options.

If your credit score isn’t as high as you’d like, be sure to check out your FHA Loan options. FHA Loans are popular, secure choices among homeowners of all credit types because they were created by the Federal Housing Administration. FHA loans require a small down payment and offer the most choices for refinancing, especially with cash out. FHA loans don’t have the same income and credit requirements as conventional loans. If you’ve been told your income or credit is too low for a conventional mortgage, take a look at FHA. You can still get the benefits of FHA’s low rates and secure monthly payments.

Bottom Line

The bottom line is that you should do everything possible to maintain a good credit history to keep your score high. The higher your credit score, the more loan options you’ll have when it’s time to get a mortgage. If your credit report contains a few blemishes, don’t worry. There are many valuable resources where you can learn what you can do to improve your credit score like the Guide to Managing Your Credit.

Credit Bureaus

ABOUT TED CANTO Ted is an experienced Mortgage Advisor for the last 13+ years and is also known for his mortgage commentary and internet workshops within the real estate community. Also known as "The Mobile Mortgage Pro", Ted has honed the power of the smart phone, laptop, tablet computing, text, email and social media to ensure that he is always accessible to his clients' “wherever, whenever” to meet their needs. Ted has helped thousands of families finance their new home or refinance their current home in the Arizona and California market. Call, text, or email him to discuss your home financing @ 480.650.8602 or ted@tedcanto.com

Ted Canto

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