On The Money

Asking for a Credit Report: A Step Closer to Your Home Buying Dreams

Housing loan conceptIf you intend to secure a house through a mortgage, you need to keep your eye on your credit score and the credit reports. Despite the considerable roles these two factors play in helping them to realize the dream of owning a home, half the American public doesn’t check their credit reports.

The most astonishing bit is you are entitled to three credit reports every year free of charge. Such oversights are what make it difficult for prospects to have a hard time qualifying for a mortgage in Utah.

American Loans notes that with a simple click of a button, you can access your credit report and ascertain that your credit score is on point.

Avoiding Costly Mistakes

Credit score, which ranges from 300 to 850, is a three-digit summation of your financial well-being and creditworthiness. Creditors use these scores to evaluate how much of a risk you pose to their money.

Errors in your credit reports, which affect 5 percent of the population, tend to lower these scores substantially.

Lenders view scores below 700 as high risk and as such, saddle them with high-interest rates. If you fail to raise the 20 deposit, you will also have to pay private mortgage insurance. Combining these two results in a hefty monthly payment, while much of the money doesn’t go towards repaying the loan.

Safeguarding Against Identity Theft

At first glance, identity theft sounds like something straight out of a movie or one that happens to other people. However, the reality is that everyone is susceptible to identity theft.

You don’t even have to be rich to fall victim. Once a cyber criminal has your private information — social security number, date of birth, account number and home address — they can unleash mayhem.

They can apply for a credit card in your name or rack up debt on the existing one. It is only by looking through your credit reports can you spot such anomalies before they ruin your life.

If you are planning to secure a mortgage to buy a home, you can’t afford to ignore the state of your credit score and credit reports. Doing so would sound a death knell to your dream of owning a home.