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Credit Report
Unfortunately, too often couples interested in buying a home have no idea the importance of having a good credit report. This is a common problem and it is not until a major purchase is made that they realize the value of having good credit. If you are thinking about buying a home in the near or even distant future, the first thing you should do is establish solid credit or clean up the credit you already have.

Most people think their credit report is in excellent condition and that everything reported is accurate. Unfortunately, this is seldom the case. In fact, most credit reports, even for people with flawless credit, will find their report riddled with errors. When a credit report has errors, it could easily prevent you from buying the home you deserve.

The first thing you need to do is make sure the report has accurately tracked your history of paying your bills on time. If you have been paying faithfully within the 30-day timeframe but your report is showing delinquencies, you will need to contact each of the creditors showing an inaccuracy and request a letter stating that you have paid on time each month. Additionally, make sure you have a copy of each month’s statement that will back the letter.

Additionally, look to see if any businesses have run an inquiry on your credit without your permission, which is against the law. Unless you apply for a loan, credit card, or some other form of credit, no company or individual has the right to run a copy of your credit. The problem is that when you are in the process of trying to buy a home, if the lender or financial institution sees too many inquiry, the see this as something negative. Generally, it tells them that you are stretching your financial means too tight and the purchase of a home will only stretch the money further. Therefore, you would do best by not applying for any credit within six months of buying a home.

Another thing you need to look for is any charges that have not been authorized. Look for new or different companies or unauthorized charges from existing creditors. If you see anything that does not belong, you need to again, pull out statements and copies of cancelled checked as well as obtain a letter from the creditor advising that you did not authorize the charge.

As you get ready to buy a home, keep in mind that what lenders and financial institutions are looking for is one year of consistent, on-time payments. Additionally, they do not want to see a bunch of new debts or inquiries. In other words, they are looking for progress in getting out of debt and keeping your credit report clean. This shows to them consistency, control, and the ability to manage money, which is a huge consideration when buying a home.

Your credit report, good or bad, is what will paint a picture of your past and current history to the lender. While some mistakes can be caused simply by human error, others can be created from identity theft. Therefore, whether buying a home or not, you should request a copy of your credit report about once a year to ensure it is accurate. This will save you time and a huge headache when you decide to buy a home by having your report in great condition to begin with.

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