A Beginner's Guide to Understanding Your Credit Report

If you want to become a homeowner someday, you should be monitoring your credit. Your credit score plays a key role in determining whether or not you’ll be approved for a home loan, what type of home loan you can get, and the interest your loan will accrue. To find your credit score, you’ll need to check out your credit report. Here’s how!

How to Request Your Credit Report

Now, it’s easier than ever to request your credit report. There are a few sites you can get your credit report from, including annualcreditreport.com which allows you to request one official copy of your credit report a year for free. You will have to fill out some basic information about yourself including your birthday, Social Security Number, and address.

Your credit score will range between 300 and 850. Your credit score represents the likelihood of you being able to pay back a loan. The higher your score, the better your credit is and the easier it will be for you to obtain financing for your home. You’ll also get superior options for interest and down payments.

The Four Parts to Every Credit Report

There are three national credit bureaus that will calculate your credit score: Equifax, Experian, and TransUnion. There should be some kind of key on the report that guides you on how to read everything. Check this out first so you have a better understanding of the information on your account.

Depending on what credit bureau you are getting your report from, the credit score and the report may be a little different. This is because different lenders and creditors report to different bureaus. But you can still expect every report to include some of the same info.

Identifying Information

First, your credit report will list some basic information about you, including your name and any aliases you have. This could include times a creditor misspelled your name. You’ll also see your birthday, your current address as well as the address of any past residences, your phone numbers, and your SSN. Your employer and previous employers will also be listed.

Accounts History

This portion of the report gets into more of the details about your credit accounts, including credit cards and loans. You’ll see the names of your creditors, the corresponding account numbers, and their balances. There will also be payment history including the status of your account, such as whether it’s past due.

Credit reports are usually updated every 30 days. So if you’ve opened a new account or made a payment that hasn’t shown up yet, that’s probably why.

Public Records

Ideally, the public records section of your credit report shouldn’t have anything listed. But if you have bankruptcy, tax liens, or judgments in your past, those will show up here. These items continue to show up on your credit report for seven to ten years.

Inquiries

You can also see any people or organizations that have recently requested to view your credit report. For example, a credit card company, landlord, or insurer might request access to your credit report.

What to Look for on Your Credit Report

If you see anything inaccurate in your report, you should report it to the lender or collection agency as quickly as you can. Hopefully, it will just be a simple mistake that is easily remedied.

If you see something like multiple new lines of credit you never applied for or medical debt that isn’t yours, you are probably the victim of identity theft. If left unaddressed, this can severely damage your credit. You should immediately contact your bank, lender, and the credit bureaus. You may also want to freeze your credit as an extra precaution.

Discover Your Lending Options with the Carolina Mortgage Team at Revolution Mortgage

If you have your credit report and you aren’t sure what your options for a mortgage are, that’s okay! Talk to the Carolina Mortgage Team experts at Revolution Mortgage. We’ve helped many people just like you obtain the financing they need for their dream home. Get started by contacting us today!

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