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.
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.
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.
