Before you dive into the process of buying a home, you need to have a solid understanding of your credit report. What it says and your overall rating will affect your ability to get a home loan. It will also influence the rate of interest you have to pay on that loan. Your credit report will list all of your debts including:

  • Who you owe
  • How much you owe
  • Remaining credit on credit cards
  • Payment history
  • The number of creditors
  • Any collection accounts
  • The length of time you have had credit.

All of this information is compiled to determine your credit score. The higher the score, the more likely it is you can get a mortgage loan. The higher it is, the lower rate of interest the lender is going to offer you. While the economy also affects your interest rate, the majority of it is influenced by your credit score.

Your overall score can be as low as 300 or as high as 900. It is encouraged for you to review your credit score and all items listed on your credit report before you apply for a home loan. If you find any errors, get them corrected before you apply so they can help you get the home you really want. By law, you have the right to obtain a copy of your credit report at any time. Your mortgage professional can help you to get those documents to review.