There are a lot of requirements we need to comply to qualify for a mortgage loan that will be used to purchase a house. Since the process is not easy, it is essential that we prepare for it. One of the things we should prepare is our credit because this will affect our application in a big way. The lenders will evaluate this first and use this as basis in their decision. Bear in mind that our credit score represents our ability to pay our debts as well as our behavior towards our debts.
In addition to that, your credit will also affect the kind of term that your lender will give you. If you have a good credit, your mortgage rate will be similar to the rate offered in the market. However, if It is low, expect to have a higher rate. You will also need to make high down payment.
This is why you have to check, correct or repair your credit before applying for a mortgage loan. Check for malicious transactions, erroneous records or get current with your payments.
How to correct the wrong information on your credit report?
Most reports are not accurate because of the errors committed when recording the transactions. This is why you have to check it regularly. Here are some tips to help you:
Request a copy of your credit report. You are entitled to receive a free copy from the different credit bureaus once a year. You can send them an email or write them a letter. You can also call them. You need to check the report to see if there is a need to correct or repair it.
Once you have the copy of the report, review it. Check if there are anomalous transactions. Examples of these are purchases you did not make. If there are any, call for help right away, as you might be a victim of identity theft. Check your card immediately or recall any documents that you filed containing your vital information.
Highlight the transactions you want to question. Use a marker so that it will be easier for you to go back to that. It will be easier to find to.
Look for documents that will back up your claim. This makes it essential to keep your receipts and other documents that will be useful in case you file for a dispute. Arrange them according to its date so that you can easily locate a document when you need it.
Prepare a letter of dispute and attach the marked copy of your credit report. Attach copies of your supporting documents as well. you look at the back of your report for an instruction of how to file a dispute.
The above steps will help you correct wrong information recorded in your report. However, what will you do if your low is score because you are not current with your payments? One of the best ways to resolve this is to get current right away and pay off those that were charged off.
You can also avoid problems if you talk to your creditor or your debt collector as soon as you realize that you will be late with your payments. You can ask the creditor to lower your monthly dues or reduce the interest rate so that you will be able to afford the monthly payment. By talking to them, you can make new arrangements that will be favorable for both of you.