Battling the Credit Crisis with a Credit Check
Those little numbers on your credit report are taking on a whole new life of their own. Not that your credit score hasn’t been important before, but it’s taking on a more important role since the credit crisis than ever before. Tighter mortgage lending guidelines have seen to that.
Earning a high credit score gets consumers better interest rates on mortgages, credit cards and car loans, which can save a bundle of cash. A credit score of 740 or better now gets the best mortgage rates. Lower scores cost consumers more in monthly mortgage payments and can result in higher credit card interest rates.
Checking your own credit report annually is advised by credit consultants, and despite rumors and reports to the contrary running your own report won’t lower your credit score. By viewing your credit report you can monitor and manage detrimental items which need to be removed or repaired before it’s time to apply for a mortgage or other loans. It’s easy to check your own report online today through companies offering free credit reports.
You can also view credit history and credit scores of all three major credit reporting agencies for free online. These companies also provide additional services for a monthly charge. But if you don’t want any additional services just cancel the free trial membership before the trial period is up and you won’t be billed at all.
Under Federal law you have the right to check your credit report for free annually from the three credit reporting companies. The Federal Trade Commission urges consumers to check their credit report annually to protect their credit standing. Widespread credit fraud and mortgage fraud have prompted a series of changes effecting consumer rights over protecting their credit.
Protecting one’s credit standing in this increasingly automated, Internet world is becoming more and more important. Many consumers don’t realize they’ve been a victim of credit fraud until they go to apply for a new mortgage or other credit. It can take months to get negative items that are in error removed from your credit report, but most of the time consumers can do it themselves instead of paying companies that specialize in this to assist them.
Foreclosures, bankruptcies, judgments and late payments are the most damaging factors that can hurt your credit score, and should be checked for accuracy. Foreclosures remain on credit reports for 10 years, but that doesn’t mean you can’t obtain a mortgage in that time. Improving other aspects of your credit worthiness during the two to three year period before you apply to obtain a new home mortgage can set you up to get a loan at reasonable rates under current lending guidelines.