Understanding Your Credit

Your Credit Report

The Importance of Your Credit Report

As part of the application process your lender will check your credit by ordering a credit report. Your credit report is a record of how well you have managed your finances in the past such as: credit cards, car loans, student loans, etc.

How to get your credit report

The Fair and Accurate Credit Transactions Act (FACTA) allows you to request a free credit report once every 12 months from each of the 3 credit reporting agencies. To receive a free credit report, visit AnnualCreditReport.com or call (877) 322-8228.

What to look for on your credit report

It's important to review your credit report and clear up any errors or unresolved negative issues by contacting the credit lender such as:

A credit limit that is lower than what your billing statement shows
Accounts that are not yours but appear on your credit report
Open accounts you thought were paid off or bills that show delinquencies
Inaccurate information that can be removed by your credit provider

Your Credit Score

Making Sense of Your Credit Score

Your credit score is created from information on your credit report. Credit scores generally range from 300 to 850, with a higher score indicating you have better credit.

Credit Scores

Category	Excellent	Good	Average	Fair	Poor
Score	720 or above	681 to 719	621 to 680	600 to 620	599 or less

Your credit score is not static—it changes throughout your life based on how you manage your loans and credit card debt. To get your free annual credit report where you can review your credit history visit AnnualCreditReport.com.

Improving Your Credin

The better you manage your debt, the better your credit—and the more confidence a lender will have in your ability and willingness to repay your home loan.

Benefits of Good Credit

Good credit can help you get approved for a home loan
Often, borrowers with good credit scores get better rates
Good credit, low-risk borrowers may get flexible loan terms

Do you want to improve your credit score? Or do you already have good credit and want to find ways to maintain a good credit score?

Here are some general guidelines

Pay your bills on time

Do you make your payments on time? Do you typically pay in 30, 60 or 90 days past due? If you have missed payments, get current and stay current.

Reduce your credit card debt

Paying down your credit cards and making larger payments above the minimum shows your ability and willingness to repay debt.

Maintain a good credit history

Keep your accounts open and maintain a good long term credit history by paying your bills on time.

Mix up your credit

There are 3 main types of credit: mortgages, auto financings and credit cards. Having a variety of loans could help your score.

Check your credit report

Order a copy of your credit report and clear up any errors or unresolved negative issues by contacting the credit lender. You can get your credit reports for free once a year at AnnualCreditReport.com—and you're never penalized for checking out your own credit report or score.

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