Buying Guide

Importance of Your Credit

Your credit score is the financial foundation for buying a home. Your lender will definitely be checking your credit when deciding on your mortgage loan, so it's a good idea to check your credit report ahead of time.

Your credit score is based on the information found in your credit reports from the three main credit reporting agencies: Equifax, TransUnion and Experian. We suggest reviewing the information in each report and correcting any errors, to avoid surprises when talking to your mortgage lender

We recommend avoiding 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 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.

To avoid any surprises, check your credit reports as soon as possible.