Good credit goes hand in hand with acquiring a mortgage these days, especially a loan with a reasonable interest rate. That being said, examining your credit rating should be the first step you take before applying for a home loan. A free credit report is accessible from AnnualCreditReport.com, which will give you access to your credit rating from the three main credit reporting agencies, Experian, Equifax and TransUnion. What these reports will not give you is your FICO score, something that can be purchased for roughly $15.
The FICO score is what lenders go on when determining whether to lend money and under what terms. The FICO score is achieved by weighing out your payment history (whether you pay your creditors on time) and your debt history, this is achieved by weighing credit reports from the different agencies and is updated as credit reports change. The FICO score ranges from 350 to 850, with 850 being the best score possible.
The free credit reports are a great place to start to clean up your credit. You can start with the first discrepancy on the list and go from there. Contacting entities that have posted against you is possible. A little time spent on the phone can often help repair and improve your credit.
The old adage “money makes the world go round” is obsolete for those who cannot have access to it due to poor credit. Knowing what your credit score is and fixing the issues that exist within it can only help you in the long run.
Related article from the New York Times, “Healing a Wounded Credit Score”.