If purchasing a home is on your mind, it’s a good idea to check your credit report at least 3-6 months prior to starting the buying process. This is to make sure there will be no last minute surprises on your credit that might prevent you from closing. This also gives you something called “buying power.” Sellers are more comfortable accepting an offer if they know you have already been through the approval process.
You’re entitled to a free copy of your credit reports every 12 months from each of the three nationwide credit bureaus by visiting:
CREDIT REPORTING AGENCIES
If there is a discrepancy in your credit report, immediately notify the agency in writing. Submit a written notice to each bureau and include the following information:
- Social Security Number
- Description of the incorrect reporting (include copies of any documentation)
- Request that the creditor who is reporting the error respond to a request to remove the incorrect reporting
The Fair Credit Reporting Act requires credit bureaus to investigate errors within 30 days of being notified and to fix any errors that are found. The entire process of repairing your credit can take 14 to 120 days, depending on the issue.
If you have paid your bills in full and on time for at least the past two years, then chances are your credit is in good shape. If you’ve been denied credit in the past, or have had serious credit problems, don’t give up your quest for a mortgage. It may cost you more, but there are lenders who will negotiate the terms of a mortgage.
Keep in mind that credit problems, unless cleared up, can remain on your credit report for up to seven years and bankruptcies for up to 10 years.