What You Should Know about “FREE” Credit Report Services
By Pete Shrader, Mortgage Banker & Realtor
MoneyLink Mortgage, MarketLink Realty
Twin Cities, Minnesota
So, you’re wondering how good your credit is and you’ve heard about those free credit reports you can get online. But ‘free’ may not be free. There could be strings attached. Most ‘free’ credit report providers (credit.com, myfico.com, freecreditreport.com, creditreport.com, and others) require you to subscribe to their credit monitoring service for a monthly fee.
Did you know?
There are different scoring models (different ways to calculate credit scores) that are used - depending on who pulls your credit report. There are mortgage scoring models used by mortgage companies, brokers, and loan officers. There are insurance scoring models used by insurance companies. And there are consumer scoring models which are distributed directly to consumers.
What does this mean?
Different models produce different scores for different industries. You are allowed to obtain a free copy of your credit report from each of the 3 credit bureaus once a year without subscribing to a service or paying a fee. Just remember that the scores you obtain will be based on the consumer scoring model and may differ from scores that a mortgage or finance company may see on their report. The official free credit report website is www.annualcreditreport.com.
Getting a free credit report is a good starting point. You then need to be able to read and understand what is contained in your report. Actual credit reports contain a lot of information and can be confusing. On average, up to 33% of all credit reports contain errors. Will you be able to spot mistakes on your report?
The importance of examining your credit report as a first step to pre-qualification for a mortgage loan has increased. Clean, error free credit can greatly improve your chances of getting competitive interest rates and access to more mortgage options.
For more information or help deciding what to do based on your unique situation email me or call my direct line at (952) 292-0285.
See the Federal Trade Commission’s website for information on repairing your credit. Pete Shrader is a Mortgage Banker, a Realtor, a Real Estate Investor and the author of the Smart Seller Guide. This article is not meant to offer legal advice and is not an offer to lend or to lock a rate. Always consult the appropriate professional for tax or legal advice. © Pete Shrader 2007