| Advanced Summary | | | | report from the three companies mentioned |
| This article will educate first-time home buyers on | | | | above. The easiest way to do this is to visit This |
| the relationship between credit and mortgage | | | | is a joint website managed by all three of the |
| loans, and why a thorough review of one's credit | | | | credit reporting companies. By law, you are |
| should be part of your home buying process. | | | | entitled to one free credit report per year, so |
| | | | you shouldn't have to pay anything if this is your |
| Credit and mortgage loans go hand in hand. When | | | | first time. |
| you apply for a mortgage loan as part of the | | | | Looking for Credit Errors |
| home buying process, the mortgage lender will | | | | Once you receive your credit report, review it for |
| review a number of your financial factors. One of | | | | errors or inaccuracies. Check the personal |
| those factors is your credit score, which is | | | | information to make sure it's correct. Look for |
| derived from your credit report. Basically, the | | | | loans or other lines of credit that are not yours |
| mortgage lender wants to know (A) your credit | | | | (possible credit fraud), and anything else that |
| score, which they will use to assess the risks | | | | doesn't seem right. If you find an error, visit the |
| involved in loaning money to you, and (B) your | | | | website of the company in question to submit a |
| ability to manage debt. | | | | correction request. Or call the company's |
| Reviewing Your Credit | | | | customer service number and ask how to |
| Long before you apply for a mortgage, you take | | | | proceed. |
| a look at your credit. The idea is to get the "lay | | | | Don't delay in correcting credit mistakes. The |
| of the land" before a mortgage lender puts you | | | | process takes time, so start it as soon as you |
| under the financial microscope. At the least, this | | | | find an error. Under the Fair Credit Reporting Act |
| will help you avoid unpleasant surprises. At most, | | | | (FCRA), credit reporting companies bear full |
| this will allow you to identify errors on your credit | | | | responsibility for correcting inaccurate credit |
| report and work to correct them. | | | | reports. So don't be shy about asking them to do |
| Credit reports are maintained by three credit | | | | so! |
| reporting companies. Chances are, you've heard | | | | Credit Report vs. Credit Score |
| of these companies before. They are Experian, | | | | Let's clarify the difference between a credit |
| Equifax and TransUnion. Your credit score is | | | | report and a credit score. When you order your |
| derived from the information found in the three | | | | credit report, you won't receive a score. The |
| credit reports maintained by the three | | | | score is usually determined by the mortgage |
| aforementioned companies. | | | | lender, based on information found in the credit |
| Getting Copies of Your Credit Report | | | | report. So if you want to know your credit score, |
| As part of a thorough credit-review process, you'll | | | | you'll need to purchase it separately. |
| need to start by requesting copies of your credit | | | | |