Finding Your Credit Rating
Finding your credit rating
can be an intimidating task, but for anyone hoping to purchase a home it is a
necessary step. Your credit rating has a
huge effect on the process of purchasing a home, from the types of lenders you
will approach, to the type of loan you will get, to the interest rate you will
be offered. So how can you find your
credit rating, and how do you evaluate it?
Finding Your Credit Score
There are three major
credit companies in the United States that offer you free access to your credit
score-Experian, TransUnion, and Equifax.
These companies can give you a detailed breakdown of your credit
situation; however, don't assume that each report will be identical. Since these reports are free, it is in your
best interest to get all three to be sure that you are getting the complete
picture.
Understanding Your Credit
Score
When obtaining your credit
report be sure that you request a consumer report. These reports are simplified and designed for
the average consumer, and are less confusing than the reports which are sent to
lenders. Your credit report will likely
contain four sections, including personal information, credit history, public
records, and inquiries.
Personal Information-When
looking over the documents, first be sure that your personal information is
accurate. There may be minor spelling
mistakes in your name or address, for example, or information about previous
loans from old addresses. Overall the
information should be accurate, and contain no information which does not
pertain to you, or looks as if it might be fraudulent.
Credit History-The second
section of the report is the most important.
This will include information about the credit accounts you hold with
institutions that report to that particular agency. It should include the account numbers, the
name of the creditor, the amount of the loan, the type, the rate, the
outstanding amount, and the amount of any fixed payments you make. It will also include information about any
credit accounts you may hold with other people.
While each report may not be complete, it is important that what is
included be accurate.
Public Records-This is the
section that you prefer to be blank. It
includes reports on such things as bankruptcies, judgments, and tax liens. Again, it is important that you ensure that
this section is accurate.
Inquiries-This section
includes information about any credit applications you have made or offers you
have received. Overall, this section is
usually ignored by potential lenders, but it is important to check it for
accuracy.
