Low Mortgage Rates for Smart Loan Shoppers
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Low Mortgage Rates for Smart Loan Shoppers |
What are Credit Reports?by Joe Taylor, Jr.CMR Columnist Credit reports contain information about your credit history. If you ever fail to pay your mortgage, your hospital bill, or your other debts on time, lenders may inform the credit bureaus about your actions. Though credit reports also track positive information, "dings" on your credit can shackle you to higher interest rates and sub-prime mortgages for as many as seven years. What Does Your Credit Report Contain?The three major credit bureaus, Equifax, Experian, and Trans Union, release their own versions of your credit reports. Each one links your personal information to your financial accounts and payment history. Depending on their policies, mortgage lenders might report the length of your loan and the amount of equity in your home, along with your interest rate and the number of late payments you made in the last 24 months.Credit reports also connect mortgage lenders, banks, and other financial institutions to your employment history and to your public records. Outstanding warrants, arrests, prison sentences, and bankruptcies all appear on your credit report. These events can all increase the interest rates you pay on your mortgage, credit cards, and personal loans. What is Your Credit Report Used For?Lenders rely on your credit report to determine whether to underwrite a mortgage or to offer you preferred interest rates. Employers sometimes look at credit reports to gauge a candidate's personal responsibility, while landlords review credit reports to prevent writing leases to irresponsible tenants.Though credit bureaus do not make the final decisions on any of these issues, the data they collect influences the companies you deal with. Therefore, experts suggest checking your credit reports from all three bureaus at least once every year to pinpoint and eliminate inaccuracies. Sources: Card Report Privacy Rights Clearing House Search Warp About the Author Joe Taylor, Jr. coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities. © 2006 CMR. All rights reserved. |