It is very important that you know every detail of your credit report and how it influences the granting of any credit, including a mortgage loan. Once you do so, schedule an appointment with one of our Mortgage Consultants for guidance and pre-qualification.
Here you will learn:
- What your credit report is
- What information it provides
- How the score works
Your presentation letter to the bank
Your credit report summarizes all debts you have with the companies reporting to the credit bureaus. It represents your payment history and your means of fulfilling your debts. It is important that you make sure all the information it contains is correct. It is also important to have a good credit score when applying for your mortgage loan, since it greatly influences the granting and terms of your loan.
Basic data in your report
All credit reporting companies, Equifax, Experian and TransUnion, include the following data in your report:
- Your information
Name, address, social security number, birthdate, and your employment information.
- Credit history
Your credit accounts which include account opening date, your credit limit or loan amount, account balance due, and your payment history. Among types of accounts considered in the credit history are:
- Credit Cards (Visa, MasterCard, American Express, Discover, etc.)
- Store credit accounts
- Term loans, in which you make regular payments (ie: cars, student)
- Financial Company accounts
- Mortgage loans
- Inquiry for new credit sources
A list of all those who have accessed your credit report in the last 2 years. It contains two lists of inquiries:
- Volunteers: when you apply for credit and authorize the financial institution to request a copy of your credit report
- Involuntary: when an institution requests your report in order to send you a pre-approved credit offer by mail
- Public Registry Information
Collects your court case data. Among actions that may appear here are:
- Bankruptcy - will remain on your credit report from 7 to 10 years (depending on the type of bankruptcy: Chapter 13 or Chapter 7, respectively)
- Legal actions
- Salary withholdings
- Bank account seizures
- Late fees
Includes details of overdue or unsettled payments, how many exist, how late the payments were made, past due amount, and how recently they occurred, among others.
- Your Credit Score
Your credit score is one of the most influential factors when determining the type of financing, interest rate, and guarantees required by a financial institution in order to grant a mortgage loan. Credit scores fluctuate between 300 and 850 points. The higher your score, the better your credit is considered and the better the financing conditions.
You can request your free credit report once a year through www.annualcreditreport.com. If you find any incorrect information within your report, quickly contact the provider company for correction.
Actions that affect your credit score
Your credit score is one of the most important factors taken into account when qualifying for a mortgage loan. It will determine the type of financing, interest rate, and the guarantees that will be required. Protect your credit by avoiding:
- Payment delays (this is the main factor that affects your credit)
- Numerous accounts with debts
- Frequent credit information requests from different institutions in short periods of time
- Keeping the balance due of cards or credit lines at or near the maximum approved
- Excessive use of cards for regular purchases or expenses, without paying off spent balance at the end of the month
Actions that help you keep a good credit score
- Always paying bills on time
- Keeping a low balance due in your cards and credit lines
- Paying credit cards and credit lines regularly without cancelling, proves that they are being used responsibly
Check your credit every year
Your personal credit is important. We recommend you review your credit report every year. Before applying for a mortgage loan, ask for your free credit report at www.annualcreditreport.com. If you find errors in your report, contact the provider company and request any corrections. There are also credit cards with credit reporting services and online companies that keep you informed of changes in your credit report.
Subject to credit approval. Certain terms and conditions apply.