When
applying for a loan or any type of credit, records of your past history with
other creditors is key. Whether or
not you receive a mortgage or credit card will most likely depend on your
credit report from all three bureaus. This
is why it is very important to check your credit report to see where you stand
to ensure that all information is correct and up to date.
Before
applying for any loan, it would be in your best interest to check your credit
report. Let’s say that there are errors, wouldn’t you
want to be the one to find them and not the potential creditor granting you
credit? If there are any mistakes,
make sure to dispute them and have them removed or taken care of.
If
you have made mistakes in paying previous loans, made late payments, bounced
checks or had any other problems, you still may be able to reduce the amount
of damage they will do to your credit. Communicate
with your creditors and tell them what is going on. Being honest can’t hurt and it is worth a try. We are talking about your credit here!
You
can request a copy of your credit report from each of the three credit bureaus:
Equifax, Experian and TransUnion. There
is small fee per report that is well worth the price.
However if you applied for a loan and got denied, you are entitled
to a free copy of your credit report that you should definitely request a
copy of. This request should be in
writing and you should also include a copy of the declined loan application. You can also get a free copy if you are out
of a job, planning to apply for a job, receiving public welfare or believe
that the credit file contains mistakes resulting from fraud.
To
obtain a copy, call the phone number of the credit bureau and follow the prompts
directions or order online. Some of
the information that you will need to supply is your full name, date of birth,
current and former address, social security number, spouse’s name and your
phone number.
Timing
If
you plan on applying for a major loan such as a house or car, it is very important
to give yourself enough time to correct mistakes or clear up any delinquent
accounts you may have. Here are some
guidelines.
For
a house, you should definitely check your credit at least three to six months
before you apply for a mortgage.
For
an auto loan, check your credit and set up financing with your bank or credit
union before you start shopping.
For
credit cards, check your credit report before you apply.
Check
the Details
Once
you get your report, you should check it to make sure that ALL information
is correct. Here is a list of items on your report to carefully
look over:
Your
name or names if you are or were married
Social
security number
Date
of birth
Addresses
of places that have lived
Records
of delinquent payments or other problems
Tax
liens, judgments, arrest records, suits and other negative information that
must be dropped after seven years
Bankruptcies
must be taken off after 10 years
Pending
accounts
Accounts
that have been closed
Named
of places that you work
Where you are currently working