You probably know that it’s a good idea to check your credit report when you’re planning on making a big purchase, like a house. However, that really isn’t enough for most people. Mistakes on your credit report can take months to correct, and that means your purchase could be delayed or even completely derailed if your lender doesn’t like what’s on your report.

    • Start by Requesting Your Credit Report: The three major credit agencies, Equifax, Experian, and TransUnion, are required to provide you with a free credit report every year. You can easily request them online. You can request one from each company, or all three at once. If you’ve never done it before, you should probably request all three at once. People who are familiar with their reports often space them out, ordering one every few months, to keep tabs on their credit.
    • Check Your Personal Information: It seems obvious, but many people don’t verify their names, address, Social Security numbers, and account numbers.
    • Verify Your Accounts: Make sure that every account is actually yours and doesn’t belong to someone else. Check all the balances as well; an unusually high balance could be a simple mistake, or something more serious, like identity theft.
    • Watch for Old Information: Negative credit information (including Chapter 13 bankruptcies) stays on your report for seven years, and Chapter 7 bankruptcies stay for 10 years. With Chapter 13 bankruptcies, you repay at least a portion of the debt, so they are removed sooner. If there’s old negative information on your report, ask to have it removed. Closed accounts in good standing, though, don’t need to be removed. They can help your credit score.
    • Double-Check Double Entries: If one of your accounts has been sold to a collection agency, it could show up on your report twice. If it was resold several times, you may have several entries.
    • Dispute the Errors: All the credit agencies have online dispute forms, which is usually faster than phone calls or postal mail. If that fails, you may need to contact the lender directly, but start with the credit agency. Follow up to make sure the correction was made, and document any conversations you have with the credit agency or lenders.
    • State Your Case: If you disputed an item and it wasn’t resolved, you can add a 100-word consumer statement to your credit file, explaining disputes or problems. Anyone who looks at your file will see your explanation.
    • Making the Grade: If you’ve corrected your credit report, you should receive a free copy of the correct report. In addition, the credit agency must send corrected reports to anyone who inquired about your credit in the last six months. Cleaning up your credit report can help your score, which in turn will improve your ability to qualify for a mortgage loans and help get you a better interest rate.

 

 

If you need more information about your credit score, your credit report, or qualifying for a mortgage, call Embrace Home Loans at 407-733-6425, or contact us online.

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