Your credit report is used by banks and other lending institutions to determine your credit worthiness.

The report lists any payment delinquencies that you may have had over the past three years.

The report can be a factor in a lending institution's decision to approve or decline your mortgage application. You should review your credit report for any errors before applying for a mortgage.

Allow yourself about 2-3 months prior to the loan application for correcting of any errors that may be on your report.

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You have the right under Federal Law to know what is in your credit report.

There are three major credit bureaus that maintains your credit information. A lending institution may use all three bureaus for credit reviews; therefore, you may want to review your credit report from each.

There may be a charge or other related paid-for service to obtain your credit report.

For information:

Equifax P.O. Box 105873 Atlanta, GA 30348 (800) 685-1111 http://www.equifax.com/ Experian P.O. Box 2350 Chatsworth, CA 91313-2350 (800) 392-1122 http://www.experian.com/consumer/index.html Trans Union P.O. Box 390 Springfield, PA 19064-0390 (312) 408-1050 http://www.tuc.com/ Obtain-Your-Credit-Report Web Sites: see our credit monitoring center for information

While information regarding your credit habits for the last three years appears on your credit report, no adverse credit information, with the exception for bankruptcy, may be kept on file for more than seven years.

In reviewing your application, lending institutions review the following information listed in your report to determine your creditworthiness:

• Your current outstanding debt
• Places and the number of times you have applied for credit
• The kind of credit you have taken out in the past
• Late payments
• Over extension of your credit lines
• Liens
• Garnishments
• Bankruptcy
  

You need a credit history of at least one year to ensure a good credit report.

While there may be some advantages for being a cash-only buyer, it will not establish a credit history that the lending institution can review.

Cash-only buyers can build a good credit risk by charging small ticket items on their credit card and paying the minimum payment due or the entire credit card balance each month.

A credit score determines the rate the lender may charge you.

The credit score estimates your ability to repay a loan as evidenced by your credit history. A lender will sometimes give you a better mortgage rate based on a good credit report.

Further, a lending institution is less likely to be concerned over an occasional late mortgage payment if you have a good credit report rather than a fair credit report.

Establishing a good credit report can payoff in lower rates and better mortgage management. For more information:

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