Anyone who plans to buy a home must make sure they have no credit problems. Nothing will hold up a loan application quicker than unpaid bills or a rash of late payments. First-time homebuyers in particular need to guard their credit.

While creditors regularly consider numerous factors when making a loan decision, it is almost certain they will look at an applicant’s credit score. The score is arrived at using information contained in the applicant’s credit report. Remember, a home loan may be the largest you ever secure and it can impact things such as debt-to-income ratio, especially in the first years of the loan.

Anyone seriously considering purchasing a home is encouraged to get a copy of their credit report. The report is a consumer’s private credit history, which is maintained by three different companies. These companies, called repositories or bureaus, collect and store information supplied by department stores, credit card companies and others with whom a consumer has accounts. It is important to know that not all creditors report to all three bureaus, so your report could vary from bureau to bureau.

Under the Fair Credit Reporting Act, a consumer is entitled to a free copy of his or her credit report if they have been denied credit within the previous 60 days or are a resident of the following states: Colorado, Georgia, Massachusetts, Maryland, New Jersey and Vermont. Otherwise, you can obtain a copy of your report from each of the three companies for a fee of $8.50 or less. The three major credit bureaus are:

Equifax Credit Information Services

P.O. Box 740256

Atlanta, GA 30374-0256

1-800-685-1111

www.equifax.com

Experian National Consumer Assistance Center

P.O. Box 949

Allen, TX 75013-0949

1-800-682-7654

www.experian.com

Trans Union National Disclosure Center

P.O. Box 390

Springfield, PA 19064

1-800-888-4213

www.tuc.com

To obtain a copy of your credit report, call, write or e-mail each company. A request must include the following information:

• Your full and complete name, including such things as Jr., Sr., and III.
• Your current address.
• Your previous addresses, if any, for the past two years.
• Your Social Security Number.
• Your date of birth.
• Your phone number.

The report typically shows when accounts were opened, when loans were taken out, credit limits, loan amounts, current account balances and monthly payment amounts. It also will show late payments, missed payments, accounts turned over to collection agencies and repossessions.

The report also includes information from public records, including bankruptcies, foreclosures, tax liens, monetary court judgments, and, in some places, overdue child support payments.

First, make sure all information in the report is current. Some companies may not report to the bureaus as frequently as others, so if you have recently resolved a problem with an account, make sure that is reflected in the report. Make sure that your report reflects positive as well as negative experiences.

Ensure that the information reflects how you use credit today. Bankruptcies, by law, are to be removed from credit reports after 10 years. Also, remember that the more recent a credit problem, the bigger the role it can play in the mind of a lender. Being late with a payment five years ago isn’t as significant as being late with one six months ago.

Also look for outright mistakes. Sometimes a person with a name similar to yours might have a credit problem that is incorrectly included in your report. If you find a mistake, you should contact the credit bureau in writing immediately. It is recommended you do this through certified mail with a return receipt requested to show when the letter was sent and when it was received.

Under federal law, the bureau must look into your claim within 30 days. It will check with the creditor, and you should receive a written notice informing you of the results of the probe within five days of completion. You also should receive an updated copy of your corrected credit report.

Sources for these stories include: Coldwellbanker.com, Moving.com, Federal Citizen Information Center Home Page, Realtor.com, Homestore.com, homebuilder.com, forsalebyowner.com, San Diego Association of Realtors, Monstermoving.com, Interest.com, Century21.com and Amsouth.com.