Educate and Protect

Understanding your credit plays an important role when attempting to obtain financing for the purchase or refinance of a home. For most people, their home mortgage is the largest debt they will incur throughout their lifetime. Qualifying for the lowest down payment and the best interest rate available requires one to stay in tune with their credit score. A credit score is used by lenders to predict how likely an individual is to repay their loan. Credit scores range from 350 to 850; the higher the score the better. Being proactive and knowing your credit score will enable a borrower to be prepared when it comes time to making those major financial decisions that will have a long-term effect on themselves and their families. For more information on understanding your credit, feel free to contact us for an evaluation of your credit to get prequalified prior to your purchase or refinance.

     1. Pull a consumer copy of your credit report every 6 months. Even if you consider yourself a good borrower, you must understand that mistakes do happen. This step will help avoid surprises on your credit report when it comes time to making major financial decisions. Pulling your own credit report will enable you to take the necessary steps to have erroneous information removed within a 30-day time period. When you pull your own credit report, it will not have a negative impact on your credit scores.

     2. Learn the point system and the factors that will have an effect on your credit score. This information can be obtained through the websites of any of the major credit bureaus. Some sites even provide a simulation that will estimate how your individual score will be affected by paying down specific debts.

     3. Review your credit report with your mortgage specialist or your financial advisor. During this step you will be looking for any accounts that you don't recognize, are reporting incorrectly, or have not been updated.

     4. Protect yourself against credit or loan fraud. Do not carry your social security card with you, and do not give out your social security number unless you have researched the company that you are doing business with.

     5. Be weary of companies that offer to repair your credit for a fee. As a consumer, you have the capability of doing this yourself for the small cost of pulling your own credit report. The three major credit bureaus (Experian, Equifax, and Trans Union) will all supply a step-by-step process that explains the necessary steps to correcting erroneous information reporting on your credit report.

www.equifax.com
www.myfico.com