Although you
may think your credit is O.K., there may be items on your
credit report that are being reported incorrectly or worse
yet not yours at all.
It does not
matter how good or poor you think your credit is. The credit rating
(FICO) score that the credit agencies report is what plays
a significant role in determining your mortgage rate. Even
as little as 1 point can be the threshold to a better rate.
Let's say you
consider your current credit status as being good. Your credit rating
(FICO) score is a 688, which reflects your good credit status.
However, if your score were a 700 you may be able to get a
better rate on your mortgage. The difference can mean saving
thousands of dollars over the term of your mortgage. Now let's
go one step further. You decide to check your credit reports
to see if there are any inconsistencies. When you receive
your reports you see an item that you do not recognize. It
ends up being an account that belongs to someone else with
the same name as you but a different social security number.
This is very common. You dispute the item with the reporting
agency and it is corrected. Now your credit score is a 702
and may help to qualify you for a better rate.
You should
make it a common practice to get copies of your credit reports
at least every 3 months. If you live in New Jersey, by law
you can request a free copy of your credit report every 90
days. It does however take some time to get inconsistencies
corrected. In some cases, it can take several months. You
should review them frequently and not wait until you are actually
applying for your mortgage to find out that there is a problem
on one or more of your credit reports.
Remember you
can save thousands of dollars getting a mistake corrected
on your credit report.
Following are
the credit agencies with their telephone number to request
a copy of your report:
