Pulling Your Credit Report BEFORE You Apply For A Loan

Pic credit to Greenphile

 

Pulling your credit report before you apply for a loan can avoid unwanted real estate loan surprises and nightmares.  Just simply pull your own credit reports 60 days prior to applying for a California real estate loan.  There are a myriad of things that can be misreported on your credit report that can translate to a higher interest rate on your California real estate loan or even a denial of your loan altogether.

Late payments aren’t the only thing that affect your credit report.  Things like misreported maximum credit limit vs high credit are seen at times.  If you have a maximum credit limit of say $10,000 and you owe $4000 than you still owe less than 50% of the credit limit.  You want each card to have less than 50% owed on each credit line.  But when the maximum limit matches the high credit (the highest balance you’ve ever had on that card at one time) that’s not good.  It looks like you are maxed out on that card.  If you want to increase your credit score, it’s wise, before applying for a home loan to spread out your balances to make sure no credit card is showing more than 50% of it’s available credit limit. Some cards have better interest rates than others but we are talking about increasing your overall credit score here. Also sometimes creditors aren’t properly reporting your maximum credit limit which inadvertently can affect your credit score.

By pulling your credit reports 60 days prior to applying for a home loan, you can check into these things and fix it before the lender pulls their credit report.  You want to see if any other surprises and inaccuracies are there because once the lender pulls their credit report, that’s pretty much it.  If there’s a problem that you can fix and it’s something that would raise your score your lender can do a rapid rescore procedure that could possibly raise your score once the credit issue has been corrected but that could cost hundreds of dollars to fix it.

It’s far cheaper for you to pull your credit reports yourself through a company such as annual credit reports.com.  Once a year it’s free.  You won’t get your credit scores with the free version, you’ll have to pay for that, but just making sure the information is accurately reported is a must and will save you time and money in the form of a lower California home loan rate in the long run.

Let me know if you have any questions in regards to Pulling your credit report before you apply for a loan this article or in regards to the California home loan process by clicking here.

Best

Kevin Walton

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