If you’re thinking of buying property, you’ll probably apply for a mortgage. But before lenders decide what they’re willing to offer you, they’ll want some financial background, such as your employment history, salary, bank-account balances, and your credit history.
Know Your Status Before a Lender Does
While you could wait to find out how your financial picture appears to lenders after they’ve decided whether to loan you money, you’d be better off finding out first. One way is to request a free credit report so you can see what a lender might see.
What Is a Credit Report?
A credit report shows how much you borrow, whether you pay on time, or if you’ve been sued or declared bankruptcy. A credit report is not the same as a credit score. It usually costs money to find out what your credit score is, and can vary depending on the source you obtain it from.
How Do You Get a Free Credit Report?
You can request one free credit report every 12 months from each of the three major consumer credit-reporting agencies: Equifax, Experian and TransUnion. But you don’t have to get all three reports at once. Obtaining one report at time, like quarterly, can help you monitor changes and is a good way to find out if you’ve become a victim of identity theft.
How Does Your Credit Report Help You Buy a House?
A credit report gives you insights into your financial habits. For example, you’ll see how well you do at paying debts on time and if you tend to borrow within your means. Checking your credit report now also gives you a chance to find errors, which you can correct before they affect your ability to qualify for a mortgage loan. And if you find legitimate flaws, you might be able to take steps to improve your credit standing before purchasing a property.
Ask your REALTOR ® for help with the mortgage loan process, and see if he or she may be able to help you find resources to repair your credit if necessary.