The Importance of Credit When Purchasing a Home

When yo go to apply for a loan, the lender will usually check three credit bureaus (Experian, Equifax, and Trans-Union) as a means of evaluating your past credit history. For this reason, it is imperative to "clean up" each of the three credit bureaus of any outstanding judgements, liens, or negativity that could affect your loan decision.

The first step in cleaning up your credit is to attain a copy of your merged credit report showing all of your credit history. You then need to review it carefully and call any creditors that have reported any negativity and ask them to remove the item(s), noting the date, time, and person's name with whom you spoke. If at first you have no success, continue to call. Repeated calling of creditors in this manner works in many cases.

Be sure to get written agreements via mail or fax showing the creditor's intention of correcting of any negativity. This is important in case they actually do not follow through on the agreement, and also in case you apply for a mortgage before the correction is made.

Concerning any charge-offs or unpaid accounts, pay them, call the creditor on the phone, explain to pay the funds in full, and reasonably explain why it should be deleted off your records while requesting an official letter of their intent to do so, preferably via fax.

In the unfortunate event that a creditor refuses to remove any items, you can call the credit bureau if for a fact you know that any particular item is not yours. For any remaining items, you need to dispute them by mail, writing directly to the credit bureaus. You must write a letter to the appropriate bureau including your name, social security number, address, disputed accounts, and account numbers as well as sign the letter. Also, inform the bureau that you are disputing the data as it appears on your credit report.