Credit history check

Simply put, you must to obtain your credit history file before you apply for a mortgage. While this step is not actually required by lenders, it will help ensure that you receive the best possible home mortgage rate. Since you know that your lender will look over your credit history, you need to know at what they’ll be viewing.

There are three different companies (or credit bureaus) which keep track of the public’s credit histories: Equifax, Experian and Trans Union. When you or your lender request a copy of your personal history, the credit bureau prints up a detailed report that summarizes all of the purchases you’ve made on credit and how you’ve gone about paying them back. Your credit report will reflect any time you skipped a payment or otherwise defaulted on paying back those debts.

Because these reports are so detailed, there is a great deal of room for error. Credit bureaus are not infallible. In fact, they make mistakes all the time. For that reason alone, it is wise to peruse your credit report for errors. Even one mistake could cost you the home mortgage rate that you deserve.

More commonly, credit reports will note problems that you actually did have. Late payments are probably the most common of these problems. This includes not only credit card bills, but also utility charges and student loans.

If you have a history of credit problems, however small, you should examine them very closely. You might even want to include a note on your credit report explaining why the issue(s) happened.

Lenders tend to favor borrowers who appear like they will pay back their loans promptly and in full. Make sure that you look like that kind of borrower on paper so that you can get a low home mortgage rate.