Starting a home buying process means answering a lot of questions: How much of a mortgage can you afford? How are your cash reserves? How's your credit? What size house do you need? The more questions you ask in advance, the smoother the process will be later on. So let's look, then, at one of the key questions from this list. How's Your Credit? As part of the home buying process, you need to take a good, hard look at your credit situation. Try to do this a few months before beginning your home search to prevent delays later on. Start by ordering copies of your credit report. Credit reports are maintained by three credit agencies: Experian, Equifax and TransUnion. These agencies maintain any and all information pertaining to your personal credit -- payment habits (including late payments), bankruptcy and other issues. Your credit score is based on the information in your credit reports, which come from the three aforementioned agencies. Three agencies, three reports, three credit scores ... all about you! Get copies of your credit reports from all three agencies and review your scores. Fair Isaacs -- the organization that actually converts your credit reports into credit scores -- has a website where you can order all three credit reports at once: www.MyFICO.com. Heres a quote from the home page of that website: "FICO scores are your credit rating. Most lenders base approval on them. You have three FICO scores, one for each credit bureau, and you can only get all three from myFICO." The MyFICO website also explains how to interpret your credit score, what the score means to lenders, and what you can do to improve your score. Dont be surprised if you find an error. It happens from time to time. To correct an error, contact the reporting agency directly. And dont delay -- it may take several months to completely correct the error and remove it from your report. |
