Understand Your Credit - Find out about your credit and correct any errors now!

Thinking about buying a house? Then think about your credit history...the folks who lend money do!



How
well you have handled your credit obligations in the past is of utmost
importance to lenders today. The good news is that this information, for
the most part, is available to you.



Your credit
history is maintained by three different private companies called credit
reporting agencies: Equifax, TransUnion and Experian. Their websites
and phone numbers are listed at the end of this article. Everyone can
pull their own credit once a year for free at annualcreditreport.com. If
you’ve already done that or need to pull it again. You can order your
report by phone and charge it to your major credit card if you like. It
usually takes about a week to arrive. You can even order your report
online directly from each of the three agencies, but they have to verify
your identity before you can obtain any private information. By the
way, avoid services that offer to obtain all your reports for you in
exchange for a fee. You want the information directly from the reporting
agency, blemishes and all.



It's a good idea to get a
copy of all three reports, because if an error exists on even one of the
reports, it may negatively affect your chances of getting the loan you
want. Your credit report lists all the consumer credit that has been
extended to you over the past seven years. It will show what your
highest balance has been and what your current balance was on the date
last reported by the creditor. It will also show how many payments you
made on time and how many late payments were late. Late payments are
grouped into categories showing how late you were. For example, if your
credit card payment was over 30 days late one time, it might not be
considered too serious. But if payments were over 60 days late four
times, over 120 days late two times and over 180 days late one time, you
have had a serious problem. That problem is going to impact your
ability to borrow money.



It just makes sense to find
out about your credit and correct any errors now. Regardless of how many
credit problems you have had in the past, there are two good points to
remember.



First, negative credit information can be
reported in your credit file for only seven years. After that, it drops
out and cannot even be considered. The one exception is bankruptcy,
which can be reported for 10 years. But after that you start with
essentially a clean slate.



Second, lenders are much
more concerned about how you have handled your credit recently than with
what happened several years ago. Even if you have had a bankruptcy, if
you have kept your nose clean and paid your bills on time since then, it
is possible you could qualify for a loan after as little as two or
three years.



One of the best developments in the world
of lending has been risk-based pricing. That's a five dollar term for
the ability of lenders to offer higher priced loans to borrowers based
on their demonstrated ability to repay. In other words, even if you have
slightly fractured credit, you can still likely get a loan. It just may
cost you a little more.



Equifax (www.equifax.com) can
be reached at 800-997-2493. TransUnion (www.transunion.com) can be
reached at 800-888-4213. Experian (www.experian.com) can be reached at
888-397-3742.



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