One of the most important numbers lenders look at when you apply for a mortgage is your credit score. They go through your finances with a fine-toothed comb to ensure you have the ability to pay off the mortgage.
Your credit score and credit history is reflected on your credit report which you can request from the major credit bureaus. It is good advice to check your credit report regularly, not just to monitor your credit rating, but also to ensure that all information reflected in the report are true and updated. Having errors or inconsistencies in your report can make a huge difference in your credit score and your chances of getting better interest rates. Aside from credit issues, it can even affect your insurance rates and ability to get a job.
So what are the important errors you should watch out for in your report?
Accounts you never opened. Watch out for purchases made or accounts opened that you don't remember doing. It may be a signal that you’re a victim of identity theft or that the bureau or lender has confused you with someone of the same or similar name.
Verify that all negative info have been removed from the report. Late payments, collection notices and foreclosures should only be included in the report for seven years while bankruptcies take ten years. Make sure that these negative information are not listed past the date they were supposed to be removed from the report.
Confirm billing issues. Make sure that billing disputes and inconsistencies that have been resolved are noted as such. It would be harmful to your credit score if the lender sees unpaid bills on your credit report, which have actually been paid.
Aside from these, it is also important to ensure that your name, address, phone number and other important details are correct and up to date. You wouldn't want these errors to get in the way of buying your dream home.
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