Before you apply for a mortgage, you should know exactly what's in your credit report. Late payments, excessive loan and credit card balances, and legal action can have a negative effect on your ability to secure a mortgage. Maintaining a watchful eye on your credit report can help you avoid unwelcome surprises and help protect you against identity theft.
Through a complex mathematical model that evaluates the information in your credit report, the credit score reflects the likelihood of your ability to make timely payments.
A credit score plays a critical role in determining whether a lender is willing to accept the risk of loaning money to you. Credit scores range between 300 and 850. The higher the score, the less risk the individual generally represents. And this can mean eligibility for lower interest rates or larger loan amounts. Additionally, many employers also look at credit scores before deciding to extend offers for employment.
You can purchase a copy of your credit score directly from any one of the three nationwide consumer credit reporting companies:
Every 12 months, Americans can receive a free credit report from Equifax, Experian, and TransUnion. You can request your free annual credit report at AnnualCreditReport.com.