My Real Estate Blog

Having a healthy credit score is now more important than ever. When the mortgage crisis hit several years ago, lenders began tightening standards for loans.  The days of zero down are out, (unless you can do a VA Loan) and the days of healthy scores and equally healthy down payments are in fashion.

The first step towards home ownership is to get a copy of not only your credit score, but also your entire credit report. A credit score is a number from around 350 to 850. Any score less than 600 will make it difficult to qualify for a loan.

What can make your score low? If you have defaulted on loans, made late payments, or filed for bankruptcy, these issues will have been reported to the credit agencies and will subsequently lower your score. A lower score means you are more of a liability to a lender.

A credit report, as opposed to the score, lists out all of your open and previously open accounts. It shows balances left on loans, default or late payments, and high balances.

You can access both a report and a score at the government sponsored site, www.annualcreditreport.com.  The government allows for you to access your reportfor free three times a year, from one each of the major credit reporting agencies: Equifax, TransUnion, and Experian.

One of the main reasons to check your report three times a year is to make sure it is accurate. Identity theft is rampant these days, and you want to make sure that accounts opened in your name are actually accounts that you opened.

If you feel that you are victim of identity theft, you can request that a “fraud alert” be placed on your report. A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to protect you.