The importance of your credit report
As we prepare for the end of the year and tax season, now is a good time to do a credit check up. When you apply for a loan, your lender will look at several details of your personal finances, including your credit report. The better your credit, the better the lending terms you'll be offered.
These detailed summaries of your report include three main components. Personal information, account information, and inquiries. Your personal details include name, Social Security number, aliases or former names, current and former addresses, and employers. Account information includes your payment history, available credit, balances, and the dates the accounts were opened and closed. It also includes bankruptcies and accounts in collections. Lastly, it will include companies that are inquiring about your credit.
More about credit Scores...
Credit scores range from 200 to above 850. Scores below 620 are considered risky; 720 and over are excellent. You should be aware of what information is on your credit report by obtaining and reviewing copies of your credit report from the three main credit report agencies. You are entitled to a free annual credit report from each of the three credit reporting agencies and understanding what is in your report can help you made informed decisions about your finances, particularly as it relates to home ownership and working with lenders. The three agencies include Equifax, Experian, and TransUnion and can be easily found by searching them out on the web.
"...there are several factors that affect your credit report..."
Remember that there are several factors that affect your credit report including your payment history, your current ratio of debt to income and signs of responsibility and stability. And since not all creditors report to all three agencies, it's best to order a report from all three institutions. Your goal in ordering all three credit reports is to make sure that the information stated on each report is accurate and correct.
The bottom line is, if you are thinking about buying a home, the first step should be understanding your credit report.