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Instant Credit Reports and Mortgages

Instant credit report? How can an instant credit report help me in the mortgage process?”

It's a valid question, particularly given how long and involved the home-buying process can be. However, an instant credit report can be your best friend when financing a home. Read on…

Beginning the Home-Buying Process: Your First Instant Credit Report

If you're considering looking for and buying a home, the first thing you should do is request an instant credit report so you can examine your credit history before planning your credit future. We recommend that you view your credit report with all three credit reporting bureaus, since they can potentially contain different information about you.

Your instant credit report will give you a snapshot of where your credit history currently stands and how it is affecting your credit score. This snapshot can help you determine how big a mortgage you'll be able to receive — and at what interest rate. (Quick primer: The better your credit score, the lower your interest rate can be.)

If your credit score isn't quite as high as you'd hoped, fear not. As you begin your home-hunting search, you can also work on improving your credit score. Click here for tips on improving your credit score.

How might making positive steps affect your credit score? Everything in your credit report influences your credit score, but different weights are applied to the various pieces of information. Generally speaking, credit reports are weighted as follows:

  • Bill paying — 35 percent of the score
  • Outstanding debt and available credit — 30 percent
  • Length of credit history — 15 percent
  • Your credit mix (i.e., current loans and credit card accounts) — 10 percent
  • New credit applications — 10 percent

Beginning the Mortgage Process: Your Next Instant Credit Report

Assuming you're disciplined about paying bills on time and lowering your outstanding debt as you start looking for a home, your credit score after a few months can start to improve. How will you know? By ordering another instant credit report and score.

The beauty of an instant credit report and score is that you have the most up-to-date picture of your creditworthiness.

Taking a look at your instant credit report just before applying for a mortgage also gives you an opportunity to check for errors or inaccuracies on your report. You definitely want to find and fix these as quickly as possible by filing a dispute claim. Click here to learn about disputing information on your credit report. While resolving a dispute can be time-consuming, in many cases you'll receive a better mortgage rate once your credit history is corrected.

Since a mortgage is probably the biggest debt you'll ever acquire, you'll want the best interest rate you can get.

As you can see, there are a number of factors that will come into play when you apply for a mortgage, and, clearly, a major factor will be your creditworthiness. To prepare yourself for your mortgage application and avoid any last-minute surprises in the process (e.g., inaccurate entries or other mistakes in your report), be sure to order an instant credit report.

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