How Credit Reports Can Affect Your Mortgage Rates in Illinois
The first step in the home buying process is to get pre-approved for a home loan so you can see exactly what you are able to afford. However, a credit check is the most important piece of the puzzle in order to get you qualified with the best interest rate.
So what’s in a Credit Report?
Getting your credit checked before you purchase allows you to clear up any discrepancies, errors, or ratings if they happen to be low. It may possibly take up to 90 days for such information to be cleared off your report so get started as soon as possible.
You credit reports are filled with a history of credit card companies, record of borrowing and repaying banks, and any other lenders. When you apply to borrow anything, that lender uses this report to see if you are of good standing to let you borrow their money. They also base the interest rate they offer on the report and the resulting credit score.
Here is a breakdown of what is included:
Here is how you can request your credit report:
- Credit History: Includes account info detail (payment history, specifically about accounts that may have been sent to debt collection agencies. Also includes the number of accounts you have, type of each, and if you are in good standing with each.)
- Who is examining your credit. Any inquiries by lenders or others about your credit is recorded as well.
- Any judgments against you, such as bankruptcy.
- Any personal info: Address (current and past), Social Security #, and previous employers.
- A section for comments by you, in case you have disputed specific reports in the past.
Well there are 3 major credit agencies: TransUnion, Equifax, and Experian. Everyone should get a copy of your credit report yearly to check for errors or discrepancies so when the time comes to borrow something you may do it right away. Your Credit Report also shows if you are a victim of identity theft as well. You can receive a free copy of your credit report once a year from AnnualCreditReport.com, as it pulls reports from all three. When getting a loan for your mortgage, we pull all three reports and take the median credit score as it is a more accurate take on what your credit is.
Keeping in good credit standing is one of the best things you can do. Happy borrowing!