Understanding Your Credit FAQs

Photo credit: Stock.XCHNG

Photo credit: Stock.XCHNG

When purchasing a home, your credit history may be the single most important component of a lender’s decision when approving you for a loan.  Your credit history shows the lender that you take a debt obligation seriously and are committed to repaying your obligations. Understanding how to monitor and manage your credit is a key step to take in your journey toward successful homeownership.

How do lenders review my credit?

To determine your credit worthiness a lender will review your credit report, which is provided by TransUnion, Experian or Equifax. These three credit repositories only report to the lender what information is reported to them by your creditors.  It is not the credit bureau’s responsibility to verify the accuracy of your credit information. It is your responsibility to contact the credit bureau if you find your information is inaccurate.

How do I review the accuracy of my credit report?

To ensure your credit report is accurate, you are entitled to one free credit report each year from all three of the credit bureaus. To get your free annual credit report, go to www.annualcreditreport.com.

What if I have credit issues?

Lenders understand that unexpected events may happen and derail us from time to time.  Be honest with your lender if you believe credit may be a barrier to homeownership.  Many lenders are more than happy to work with you to get mortgage ready.  However, the reality is there is no quick fix for credit issues.  Paying your bills on time is the best way to ensure a strong credit report.

While there may be businesses out there that advertise “credit repair” or “credit help,” they can’t do anything for you that you can’t do yourself for free.  Paying someone to “repair” your credit may be only a short-term fix and may not get you the results you need.

Where do I go if I need help with my credit?

Your best solution for credit help is to speak to a HUD-Approved Counseling Agency. HUD-Approved Counseling Agencies provide free, professional homeownership counseling and education.  They can guide you on credit issues, help you contact the credit bureau, and assist you with negotiating terms with creditors if you are past due. In addition, they can work with you on your budget, set you up with homebuyer education and help you to become mortgage-ready.

For credit help in New Hampshire contact a HUD-approved Housing Counseling Agency today!

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