Protect Your Credit in Uncertain Economic Times
One of the first steps for many is to use credit monitoring, which is a service offered by companies for a fee or for free depending on circumstances--those affected by security breaches may be offered free credit monitoring and it’s always good to ask if you qualify for such free services.
Credit Monitoring Helps You Track Changes to Your Credit Score
Credit monitoring helps you to track changes in your credit report including activities and scores, but some consumers may need help interpreting the information or deciding what to do with it--ask any credit monitoring company if there are options to help the consumer make sense of the data they get from their monitoring.
Credit monitoring is a good way to start because using such a service makes the consumer more aware of how credit works, the day-to-day factors that could affect your scores in the long run, and more. Many people ignore their credit reports until they have a specific need, but this is not a good strategy for managing your personal finances ahead of a major loan application.
Do You Need to Dispute a Credit Report Entry?
The information some consumers get from credit monitoring can lead you to contact the credit reporting agencies to dispute things like erroneous information on your credit report. Identity theft is also an issue. These things cause big headaches for some loan applicants because it can take a long time to resolve the dispute.
What kind of problems can you unearth by using credit monitoring? The wrong information placed in your credit file is a common one, as is finding someone else’s information in your file (often with a name similar to yours). Other problems include outdated credit information that should have fallen off your report by now, and evidence of Identity theft.
Correcting Credit Reports Takes Time
Are you ready to apply for a major line of credit? Not yet if you have to correct a credit report. You will need more time to resolve such issues than you realize and you may find it difficult to get loan approval while a credit report dispute is underway, but not resolved. You should have any such issues fully resolved before you apply for a home loan for best results.
Credit scores and credit report information are part of the factors that go into the decision your lender makes about approving your home loan. But there are other factors to consider such as your patterns of credit use, and your debt compared to your income every month. Those will also play an important part in loan approval.
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