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| Your Credit History |
| As part
of the loan application process, virtually all lenders will
want to see a copy of your credit report. The report will
list all your long-term debts (credit cards, mortgage payments,
automobile and student loans, etc), as well as your payment
history. If you don't have a copy of your credit report, most
lenders will generally require you to pay for a copy when
they process your loan application.
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| However,
most real estate experts agree that it is a good idea to obtain
a copy of your credit report several months before you apply
for a loan. This is so you have a chance to resolve any problems
with your credit before your bank sees it. U.S. Federal law
ensures that you have access to your credit report, which may
be obtained from your local credit bureau or any of several
national firms that specialize in credit reports.
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| Late payments |
| For most
people, problems with their credit report are likely related
to late payments on a debt. If you were late one month in paying
off your credit card, but otherwise have a good payment history,
chances are most lenders won't be too concerned. But if you
have a history of late payments you'll need to document the
reasons why. A slow payment history won't necessarily get you
turned down for a loan, but you may have to pay a higher rate
of interest or otherwise prove to the lender that you can repay
your loan in a timely fashion. |
| Errors on your credit report |
| Many people
are surprised to learn that credit reports can often contains
errors or inaccurate information. If this is the case with your
credit report, you'll need to contact the reporting agency or
creditor to have the problem resolved. This can sometimes be
a slow process, so make sure to give yourself time to clear
up the mistake. |
| Bankruptcies and foreclosures |
| There's
no getting around it, a bankruptcy on your credit report is
not a good thing. But that doesn't mean you still can't obtain
a loan. Even though a bankruptcy may stay on your credit report
for seven to ten years, lenders will often consider the circumstances
surrounding a bankruptcy (family illness, injury, etc.). Moreover,
if you have reestablished good credit since the bankruptcy,
a lender will be more inclined to approve your application. |
