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Your Credit History.
Your Credit History:
As part of the loan application process, virtually all lenders
will want to see a copy of your credit report. The report will
list all your long-term debts (credit cards, mortgage payments,
automobile and student loans, etc), as well as your payment history.
If you don't have a copy of your credit report, most lenders will
generally require you to pay for a copy when they process your
loan application.
However, most real estate experts agree that it is a good idea
to obtain a copy of your credit report several months before you
apply for a loan. This is so you have a chance to resolve any
problems with your credit before your bank sees it. U.S. Federal
law ensures that you have access to your credit report, which
may be obtained from your local credit bureau or any of several
national firms that specialize in credit reports.
Late payments:
For most people, problems with their credit report are likely
related to late payments on a debt. If you were late one month
in paying off your credit card, but otherwise have a good payment
history, chances are most lenders won't be too concerned. But
if you have a history of late payments you'll need to document
the reasons why. A slow payment history won't necessarily get
you turned down for a loan, but you may have to pay a higher rate
of interest or otherwise prove to the lender that you can repay
your loan in a timely fashion.
Errors on your credit report:
Many people are surprised to learn that credit reports can often
contains errors or inaccurate information. If this is the case
with your credit report, you'll need to contact the reporting
agency or creditor to have the problem resolved. This can sometimes
be a slow process, so make sure to give yourself time to clear
up the mistake.
Bankruptcies and foreclosures:
There's no getting around it, a bankruptcy on your credit report
is not a good thing. But that doesn't mean you still can't obtain
a loan. Even though a bankruptcy may stay on your credit report
for seven to ten years, lenders will often consider the circumstances
surrounding a bankruptcy (family illness, injury, etc.). Moreover,
if you have reestablished good credit since the bankruptcy, a
lender will be more inclined to approve your application.
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