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Learning About Your Credit Status
By Kathy Johnson
California Mortgage Rate Columnist
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If you plan to apply for a loan in the near future, one of your first steps should be to learn about your credit status by checking your credit report and credit score.
Credit Report & Credit Score Basics
Your credit report contains information mortgage lenders use to determine whether or not to extend credit to you, and on what terms. This information includes your history of payments on other loans and credit cards.
Credit bureaus take your credit report and use a statistical program to determine your credit score. Credit scores generally range between 300 and 850, with the average American having a rating of about 678. A score of 660 (some say 620) or less is usually considered "subprime" or of higher risk for the lender, and will make it harder for you to get a loan with a lower interest rate and other favorable terms.
How Can You Get a Copy of Your Credit Report?
Thanks to the Fair Credit Reporting Act, every American is entitled to a free copy of his or her credit report each year from each of the three major credit bureaus, which are Equifax, Experion, and TransUnion. It's important to order your report from each bureau because information can differ slightly on each report.
To receive a free credit report, you must request it from the centralized agency the individual credit bureaus have set up. You can do this in one of three ways: by calling 1-877-322-8228, by going to www.annualcreditreport.com, which is the only authorized source for free online credit reports, or by completing an Annual Credit Report Request Form and mailing it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281.
Sources:
www.bankrate.com
About the Author
Kathy A. Johnson is a freelance writer and editor based in Florida. She has worked as a writer and editor for several publications, writing articles on health and fitness, gardening, teen issues and other topics. She is currently the features editor of Forum, a bimonthly publication of the national mothers group, Mothers & More.
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