Check Your Credit Before You Apply for a Mortgage

Before you apply for a mortgage, it's in your best interest to check your credit report. This is a step you should take at least two or three months in advance, as if there are errors, it can take up to 90 days for the three reporting bureaus (Equifax, Experian, and Transunion) to investigate and change them on your report.

Information Found on Your Credit Report

Your credit report is full of information on revolving or installment debts you've had from the present to 10 years ago, if you've paid them as promised. If you've had late payments, they are removed after seven years. Unpaid taxes are on your credit report permanently. Bankruptcies remain on your record for 10 years if it was Chapter 7 or 11, and seven years if it was Chapter 13. Foreclosures and short sales appear on your credit report for seven years. You'll find credit cards, store cards, gas cards, car loans, mortgages, personal loans, and sometimes even utility bills appear on your credit report. There is also a section covering your name, places you've lived, and your employment information.

How to Obtain Them

The Federal Government allows you to view your credit reports for free from all three reporting agencies once a year. There are several sites that ask for a credit card, these are not the government's official site. To check your credit report for free, always use AnnualCreditReport.com.

What if You Find Errors

Common errors with a credit report include accounts you did not open, addresses for places you've never lived at, or employers you have never worked for. If you're divorced, you may find your ex's information appears, and if that debt is not yours, you'll need to get that straightened out. When you're checking your credit report, look to make sure that there are no outstanding or late payments. If there are, obtain receipts, bank statements, or canceled checks to prove you made the payments on time. If payments are missing and you know you paid them, you'll also need proof. Use that information to file a dispute with each of the reporting agencies:

Equifax.com/CreditReportAssistance
Experian.com/Dispute
Transunion.com/Dispute

Because it can take up to three months to correct this information, order your credit reports and check them over carefully as early as possible. You want to have all errors fixed before the mortgage company orders your credit report and sends your information to underwriting for loan approval.