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Pulling Your Own Credit Report BEFORE Applying For A Home Loan Avoids Problems

February 23, 2012 | Comments: 0 | Views: 147

Here's a way to avoid real estate loan surprises and nightmares during the loan process. Pull your own credit reports 45 days before applying for a real estate loan. There are a many things that can be misreported on your report that translate to an increased interest rate on your home loan and possibly a denial of your loan.

Delinquent payments are one of many thing that affect your scores. An inaccurate maximum credit limit versus high credit is an issue I see frequently. If a maximum credit limit of $11,000 shows on a credit card and your balance $3000 than you still owe less than 50% of the available credit limit. Ideally each card should have less than 50% owed on each credit line. But when the maximum limit matches the high credit (the highest balance you've ever had on that card at one time) that's not good. It looks like you are maxed out on that card.

To increase your score, it would be wise, before applying for a home loan, to spread your balances to reflect no card is showing greater than 50% of it's available credit limit. Some cards have lower interest rates than others but we are talking about increasing your overall credit score here not getting the lowest credit card rate. Again sometimes creditors aren't correctly reporting your maximum credit limit which inadvertently can affect your credit score.

By checking your credit reports 45 days before applying for a home loan, you can look into these types of issues and fix them prior to the lender pulling their credit report. You can avoid surprises and inaccuracies because once the lender pulls their credit report, that's pretty much it. If there's a credit issue that's fixable and it's something that can raise your score, your lender can do advise you to do a "rapid rescore" procedure that can possibly increase your credit score once the credit report issue has been corrected but along with that comes a cost hundreds of dollars to remedy the problem.

It's less expensive to pull your own credit report through a company such as annual credit once a year, it's free. You won't obtain your scores with the free version, that costs money, but just ensuring sure the information on your report is being correctly reported is important and it will save you headaches, time and money in the form of a lower home loan rate in the long run.

Kevin Walton has been originating California real estate loans for over 19 years. I specialize in educating my clients to make the best real estate loan decision possible.

For more information please feel free to visit as well as

Source: EzineArticles
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