Check Your Credit Report: The First Step to Applying for a Loan |
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It's important to check credit report, to know what's in it, before applying for a loan. The information in your credit history helps lenders decide how much credit and what interest rate you are eligible for. Your credit reports and scores have a huge impact on the interest rate a lender offers you. Therefore, it's important that they offer a positive image of the way you manage your debts. So, when you apply for credit, the lender will undoubtedly want to check your credit report. And if you're getting ready to buy a home, access and check your credit report as early as possible to allow time for corrections to be made before the lender checks your credit. That way, if there are any errors you can take steps to correct them before you make your application. It is estimated that 50% of all credit reports contain errors significant enough for an individual to be denied a loan. So, it's advisable to take time and order your credit reports from all the three credit reporting agencies and make sure they're. There are basically two types of credit reports available to consumers: individual and merged reports. Individual reports are provided by the three major credit reporting agencies: Experian, TransUnion and Equifax. Since these agencies don't consult or refer each other while making these reports, they could contain different information. Therefore, experts say that you should check your credit report from all the three credit bureaus, as this will show you the complete picture of your credit history. On the other hand, merged reports offer information from all three of the credit reporting agencies in one easy-to-understand, credit report. Credit reporting agencies receive information from credit grantors about how people have paid back bills and other credit obligations. They then provide the information to those who extend credit. From this information, lenders can develop an idea of just how you will handle your responsibilities, once you have signed the contract for repaying the loan. So it's important, to check your credit report for your credit history. Since all the three major credit reporting bureaus don't share information, don't be surprised, if while you check the credit report, the actual details about your past and present history differ in each report. This is the major reason why you need to be informed about all three credit reports and make sure that each one is ready for your landlord or lender. You should check your credit report carefully, to see if it is up to date and correct. If you find any errors, complete the research request form that will be sent along with your Credit Profile. Give details of the information you believe is incorrect and include any documentation that supports your claim. And remember to send it by certified mail. The credit bureau must correct any errors in the report. And if there are unsettled disputes over certain accounts, it must also include your side of the argument in the report. If you check your credit report, find it accurate, but still have a questionable credit history, you need to start repaying outstanding balances, to re-establish your record. And you need to do this at least 6 months before you expect to buy your home or whatever you need the loan for. This is, because you need this time to clean up your credit report, and get funds into your account, long before the lenders come looking. If your funds are coming from you family, then you need to bury it early in your account, as most lenders do not allow money given to you by family members to count as a down payment. It is also essential that you remain informed about your credit score. Your credit score is a numerical depiction of your credit standing, and it is often the first thing lenders check when you apply for a loan. Patience and planning wins this game. So, don't be impulsive and make sure your credit is clean, check your credit report and then apply for a loan. |
