Free Credit Report - Have You Done Your Annual Review?

As a home buyer one of the most important things for you to do before you go and talk to a lender is to get your free annual credit report.  The official site is: AnnualCreditReport.com   There are others that may give you a free credit report but a lot try to sell you other products.

Why should you check your credit report before going to a lender?  If you check your own credit report it is not reported as an inquiry to the credit bureau's.  Too many inquiries like, too much credit can have an affect on your credit score or F.I.C.O. score.   FICO scores are provided by the Fair Isaac Corp. via a variety of sources.  Beacon scores are another similar provider.  They are all based on algorithms developed by individual companies that are trade secrets that take into account various aspects of your credit history

From how much credit you have outstanding, to how long you have had it opened, to how much you are utilizing of your outstanding credit lines and to what type of credit you have.  Whether you have a mortgage, revolving credit, car payment, even utilities are all scored differently.

Every consumer should review their personal credit history annually.  It's the best way to watch over what is in your file and to quickly spot mistakes and get them corrected.  If you find a mistake you can dispute most of them online and provide documentation to the major 3 credit reporting agencies - Experian, Equifax and Trans Union.

The FICO score is a range from 300 to 850 with the higher the score the better terms you can get on a loan.  Below is a breakdown of the best scores and what percentage of the population has it and how it correlates to the deficiency rate (late payments).

 In today's current lending environment its more important than ever to have a high FICO score.  Lenders across the board have raised their score requirements to obtain a loan so make sure you do whatever you can to keep it high.

With so many people with mortgage defaults in the current economy people who have great credit for over 20 years are now finding themselves with damaged credit and it will take time to rebuild it.  For those still employed and able to keep their credit clean take the time to review your credit report and if necessary make sure you have a monitoring service to alert you to any changes.  Besides simple human error, identity theft is more common place and your best defense is to check your report.

You won't regret it once you go and apply for your next mortgage to buy your dream home.