Checking your credit

Generally speaking, the borrowers who secure the best mortgage rates have excellent credit histories. When you apply for a loan, your lender will order your credit report. Make sure that you have looked at this report before your lender does.

There are many reasons why ordering your credit report is an excellent idea. First of all, it is relatively common for mistakes to be included on the report. Such mistakes can mean the difference between the best mortgage rate and one with higher interest. These mistakes can take some time to clear up, so it is best to check the report early in the home buying process.

Furthermore, you have to allow for the terrible possibility that someone has stolen your identity. Even the most cautious people have been victimized by cunning thieves. While it is a good idea to check for signs of identity theft on an annual basis, it is especially important before you obtain financing for a major purchase.

Beyond credit report problems that are outside of your control (such as mistakes and identity theft), you need to search your credit report for blemishes that were in fact your fault. Make a list of any problems, i.e., late payments that you come across. Next, for each entry on your list, determine exactly why the problem occurred. You should also figure out how to give your lender a good reason as to why this will never again occur.

You will actually need to peruse three versions of your credit report because the records are maintained by three companies: Experian, Equifax, and TransUnion. You may have to pay a small fee, but the extra trouble is well worth getting the best mortgage rate.