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Improve Your Credit Report When Planning to Buy a House

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By : Roby Hicks    99 or more times read

Before a lender approves your mortgage application, he will check your credit. He will use this to evaluate your application. This will tell them how risky it is to lend you the amount you need. Since this is the case, it is crucial that you check your credit before you apply for a mortgage. By doing so, you will have time to improve it if it does not look good.

The first thing you need to check is your credit report. Errors can potentially lower you score. Here are some of the things you need to keep in mind:

  1. Request for a copy of your credit report from the different credit bureaus. You are entitled to have a free copy once a year. To request, you can call them, email them and write them the old fashion way.

  2. Once you have received your credit report, make a copy of it. Use the copy to check the transactions. If you see erroneous entries or anomalous transactions, mark it right away. This will make it easier for you recheck and verify.

  3. Check the back of the credit report. They have instructions on how to file a dispute there. If you do not find their instructions, you can call their hotline number for assistance.

  4. You will need to attach supporting documents that would validate your claim. Attach it to the dispute letter you will be sending them. In your dispute letter, summarize the transactions you want to contest. See to it that that you arranged the supporting documents according to the order of the erroneous transaction in your summary.

  5. Always keep the original copy of the report and the supporting documents. Many letters are lost in mail. This is to make sure that you can present the original when they ask for it.

Checking your credit ahead of time will help you find ways to improve your credit. This will also prevent identity theft.

Be on time with your payments

Late payments are among the reasons why your score is low. This makes it important that you pay it on time. The best way to do this is to set a reminder on your phone or schedule your bank to pay your obligations automatically before it is due. If you think you will be late with your obligations, contact the creditor and ask if he can give you a leeway. If you have been a good payer, your creditor will most likely consider.

Keep your debts at a minimum

This is among the things that the lender will check. If you have more debts, they would think that you might not be able to handle additional loan. Pay off some of your debts first before applying for a mortgage loan to improve your score.

Your credit is crucial when applying for a mortgage loan. This is why it is important that check it beforehand. Follow the steps in filing for a dispute letter if there is a need. Make sure that you pay your dues on time and finally, keep your debts at the minimum.
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