If you’re thinking about buying a home in the Atlanta area, take a look at your credit report before you start your house hunt. A bad credit history can be all it takes to thwart or delay your dream of homeownership.
What’s on a credit report
The report shows everything about your credit. This includes all your lines of credit, when they were opened, whether payments are made on time, if you’re in good standing and whether any accounts have been sent to a collection agency. If you have bankruptcies, they will show up, too. The report also includes a list of anyone who is looking at your credit, your past employers and your current and previous addresses.
Before you apply for a loan, it’s a good idea to get a copy of your credit report. Lenders will use your report to determine if you’ll be approved for a loan and for how much. Your credit rating will also play a role in the interest rate you’re offered if your credit passes muster.
In addition to your credit score, lenders will also consider your income, how much debt you carry compared to your income, your job history and how much down payment you plan to put toward the house.
How to get the report
Visit annualcreditreport.com to get a copy of your report from the three credit agencies. If you find errors, contact the agency that is reporting the error. It’s important to remember that annualcreditreport.com is the only website authorized to facilitate free credit reports. Other sites that claim to offer free credit reports may charge you fees or try to scam you.
You have your report. Now what?
First, you should scan the reports for any errors. The three major companies — Equifax, Experian and TransUnion — must issue you a no-cost report every year upon request. Even if you’re not in the market to buy a house, it’s a good idea to take advantage of this and make sure the reports are accurate and you’re not the victim of identity theft.
If you take a look at your credit report and find it a little shaky in terms of whether you’ll be able to get a loan, you should do the following:
- Pay off any collections or judgments you have.
- Make sure to consistently pay your bills on time.
- Get any past due accounts current.
- Don’t make any major purchases, such as a car or appliances.
- Don’t close any lines of credit; this will lower your overall credit limit.
If you have any questions about your credit report and how it will affect your ability to get a mortgage loan, a real estate agent can answer your questions and get you headed in the right direction. The sooner your report is in the clear, the sooner you’ll be ready to land a loan and get into a new home. Visit Duffy Realty of Atlanta to get a list of preferred lenders.
Image source: Freeimages