Many homebuyers do not think about their credit until they need a loan to buy a home. In many cases their credit report is pulled and mistakes are found that need to be corrected or even worse someone has fraudulently used and ruined the homebuyer’s credit. To avoid getting an unpleasant surprise when you apply for a home loan I recommend that potential homebuyers check their credit before they start looking at homes. 

You can now get a FREE credit report thanks to Congress passing a new law that allows every person to get a free credit report once every year. One of the main reasons behind this new law was to encourage people to check their credit for mistakes and identity theft. Identity theft has become one of the most costly crimes now.  It is estimated that over 75% of all credit reports have mistakes on them and that 25% had errors serious enough to affect credit according to the TX Public Interest Research Group. Keep in mind that your credit report not only affects your chances of getting a loan but also in some cases of getting a job or renting an apartment/home as well. Many employers nowadays that have positions which involve having access to money or client account information, routinely check the credit of potential applicants in order to decrease their liability. Landlords just want to ensure you will pay the rent on time every month. 

Make sure you get a credit report from all three credit agencies because each credit agency has slightly different information. Once you get the report review everything carefully to make sure it is correct. If you find any mistakes then contact the credit agency directly via mail. The agencies have 30 to 45 days to investigate and respond. If you see any accounts that you do not recognize then you not only contact a credit agency and creditor but also put a  90-day initial fraud alert on the file. You should file a police report and also a complaint with the Federal Trade Commission www.ftc.gov.