4 mortgage mess-ups-understanding your credit scores
Ignoring your credit reports
The key to getting the best mortgage rate is good credit. A 2004 study by the U.S. PIRG, the federation of state Public Interest Research Groups, found that one in four adults have serious errors on their credit reports. Not small errors either. The Fair Credit Reporting Act requires credit-reporting agencies to fix these mistakes, but it's up to you to find the problems and to ask for the errors to be corrected.
Closing credit card accounts
While paying down your credit card balances will improve your financial picture, this is not the time to close credit accounts because reducing the amount of credit available to you can actually lower your credit score.
Getting in over your head
There is a difference between the maximum payment a borrower can qualify for (which can sometimes be surprisingly high) and the amount you can comfortably afford. Each person has to know the difference in his own mind. If you're just getting by with your current rent payment, and the lender says you can qualify for more, give it some thought. Be truthful with yourself and stay witin your comfort zone. A good honest lender will remind you to stay in that comfort zone!!
Switching jobs
Lenders like to see a steady history of employment and frown on job changes while your application is pending, unless the new job is in the same field and at the same or greater pay. If you do take a new job, experts suggest getting a letter stating you've completed the probation period for a new job to allay lender concerns.
To learn more about credit please visit:
Learn About Credit & Income:
Credit Basics| Errors in Your Credit Report? | Understanding Your Credit | Repair Your Credit | Looking at Your Income
Errors in Your Credit Report
What If Your Report Contains Errors?
The Fair Credit Reporting Act allows for an investigation into your inaccuracies, usually within 30 days. Upon completion of the investigation, the reporting company must provide the customer with a written correction of the report.
The Federal Trade Commission (FTC) enforces the Fair Credit Reporting Act and they can be contacted at:
Federal Trade Commission
Consumer Response Center
6th and Pennsylvania Ave N.W.
Washington, DC 20580
Phone: (877)382-4357
www.ftc.gov
To apply for your home loan and check your credit please go to
Learn About Credit & Income:
Credit Basics| Errors in Your Credit Report? | Understanding Your Credit | Repair Your Credit | Looking at Your Income
Errors in Your Credit Report
What If Your Report Contains Errors?
The Fair Credit Reporting Act allows for an investigation into your inaccuracies, usually within 30 days. Upon completion of the investigation, the reporting company must provide the customer with a written correction of the report.
The Federal Trade Commission (FTC) enforces the Fair Credit Reporting Act and they can be contacted at:
Federal Trade Commission
Consumer Response Center
6th and Pennsylvania Ave N.W.
Washington, DC 20580
Phone: (877)382-4357
www.ftc.gov
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