If you're thinking about owning a house, there's a very important point that loan officers look at when deciding the loan rates of your loan.
Your credit score.
A credit score is a numerical description of your financial trustworthiness and usually range from 300 to 850.
A high number shows potential lenders that your credit habits are admirable.
It indicates you make your payments on time as agreed and are responsible with financial matters.
You don't max out your credit line.
And there's few or no derogatory marks on your free 3 credit bureau report.
If you show a high rating, lenders are more willing to approve a loan request.
It also means getting lower interest rates.
But usually your credit score doesn't come with these free annual reports.
It needs to be ordered separately through the 3 credit bureaus.
But there are free methods to obtain a credit score for free from the three bureaus.
But it usually means signing up for a free trial membership to their credit monitoring program.
Which credit score to get Each credit bureau produces their own score numbers, but you want to view is your FICO score.
This is the score that most lenders utilize in making important loan decisions.
Currently Equifax offers a FICO score.
You can also go directly to FICO and order it there.
FICO is a separate entity from the 3 agencies.
The idea behind this is that creditors desire a large difference between your credit limit and your credit debt.
But it won't raise your rating.
If your goal is to boost your rating, then you should go with the thirty percent formula and use less than 30 percent of the limit.
First get rid of the big mistakes Significant mistakes on files gotten from the credit report on line offers include any errors that isn't yours.
Other items are accounts listed as unpaid or were in collections more than seven years ago.
Derogatory marks prior to seven years are supposed to be removed from your files.
In the case of bankruptcy filings, it lasts for ten.
But continue using your oldest card accounts that don't have bad marks.
Just make a small purchase each month and pay it off each month.
Check the credit limits as well Sometimes vendors report a smaller amount to the credit bureaus than the correct one.
Ask the lender to correct this information.
Also if there's late payments indicated on your files, ask the vendor to delete them.
Anything the credit agencies can't confirm as accurate after a given period has to be erased from your report.
'nudge nudge' 'wink wink'.
But don't go overboard with this method.
Otherwise your claim will be seen as frivolous.
First try disputing some of your oldest accounts with bad marks.
Then wait a few months and challenge a few more.