What Your Credit Report Is, and How It Affects Your Mortgage

Your credit report can be long and confusing. Your mortgage lenders will know how to look at this report, so it is important for you to understand it as well.

Your credit score can determine if you are approved for a mortgage, and how much your interest rate will be.

Your credit score can cost or save you thousands of dollars.

Basics

Your credit report usually contains:

Your personal information
Credit scores
Credit lines
Public records
Inquiries
Alerts
Creditor contact information
Personal Information

This is your basic information – name, address, and social security number. For starters, make sure the correct social security number is on your report. If not, you will have someone else’s credit information in your credit report.

Your prior addresses may also show up on your credit report.

Your Credit Scores

These are your scores assigned to you by individual credit bureaus. There are typically three scores. Your middle score is the "mid score" and is usually the most important to mortgage lenders.

These credit scores are usually in a similar range to each other.

For example, your three credit scores may be 728, 690, and 715. Occasionally one of your credit scores may be dramatically different than the other scores. Lenders typically still use your middle or "mid" score when they evaluate your application.

Credit Lines

These are the different credit lines (mortgages, credit cards, auto loans, etc.) that you have currently or have had recently.

These credit lines are separated into current, closed, and delinquent categories.

Obviously the more items you have in the delinquent category the lower your credit will be.

Public Records

These are any pertinent items that are a matter of public record.

Inquiries

These usually list the companies who have checked your credit in the last 90 days.

Alerts

These are any alerts that have been placed on your social security number. This may include people who have recently had identity fraud committed against them.

Creditor Contact Information

This contains a very useful list. This is the list of your creditors, and their contact information.

You can use the account numbers listed in your credit line section to contact your creditors.

You may see creditors on your credit report that you don’t recognize. This may be the name of debt collection companies who have purchased your bad debt from your original creditor.

Collection agency documentation about your debt may not be complete, or based on old information. If you pay off old bad debts they should be willing to provide you with a letter confirming that you have paid off a specific debt.