There’s been some great information on Mortgages Unzipped the last couple of weeks on credit scores and how they can affect your mortgage rates.
As Colin Robertson wrote last week, prospective buyers should definitely check their credit score long before applying for a mortgage.
This definitely isn’t one of those six-second paperwork gloss-overs. Consumers need to take a long, hard look at that report, scouring each line for inaccuracies both big and small.
Almost 80 percent of credit reports have either serious errors or other types of mistakes, according to a landmark survey conducted in 2004 by U.S. PIRG, the national organization of state Public Interest Research Groups.
What’s scarier is that 25 percent of the reports surveyed had errors significant enough to keep borrowers from obtaining a home loan. That’s one in four prospective homeowners.
Request credit reports from the three major reporting bureaus. Consumers are entitled to one free report each year. Carefully examine your report for any incorrect information — anything from dates and addresses to more serious issues like false delinquencies or accounts that do not belong to you.
If you find an error, tell the consumer reporting company in writing. Gather any copies of documents that back up your claim. The Federal Trade Commission has an excellent sample letter that consumers can use to compose their own correspondence.
The consumer reporting companies are required to investigate the claim and typically do so within 30 days.
To learn more about the process, check out the FTC’s extensive resource on disputing credit inaccuracies.
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