If you’ve ever been turned down for a car loan, home loan, or credit card, did you know there is something you can do about it? If a company is deciding whether or not to loan you money, the first thing they do is pull your credit report. Your credit report is a listing of everything you’ve ever done, credit-wise. A potential lender can look at your report and see how many times you’ve made a late payment, and how late it was. They can see how many loans you have right now, as well as your combined credit limit on all those loans. They can compare how much you currently owe, with how much you’re currently making. Examining all this information gives them a pretty good picture of what kind of borrower you are or will be.
But what happens if that information is wrong? You could be unfairly denied a loan. Sometimes your report contains information on old loans that you paid off long ago. It could also contain old credit limits or balances, and this could cause your new lender some jitters. In a worse case scenario, someone may have stolen your identity, and is racking up bills on your report.
In any case, you’ll want to review a copy of your credit report before you apply for a loan. Better to be surprised before you apply than after. There are three agencies that collect your credit data, and you’ll want to examine each agency’s version of your credit. You can get a free credit report from each agency once a year at http://www.annualcreditreport.com/ Request a report from all three agencies, then make sure the data they maintain is an accurate picture of your credit history. If you find errors on your report, you can have the agency verify it. Often the mistakes can be corrected with just the initial request.
Don’t cheat yourself. Check this out before applying for a loan. Armed with a clean credit report, you’ll stand a much better chance of qualifying for that new loan.
This post originally appeared in the April 9, 2008, edition of the Greenhorn Valley View.