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Credit Report 101 For Home Buyers and Renters

By Elizabeth R. Elstien

Information about your credit report tells home lenders or potential landlords about your credit worthiness. Data collected affects your ability to buy or rent a property and is represented as a credit score with the highest score being 800.

A credit report contains important information on your spending and payment history needed to determine if you are a good risk for those involved in the sale or rental of property. Banks and other financial companies, utility companies and insurance companies may gain access to your credit report often through signing an application granting permission or other agreement.

Credit reporting agencies collect information about you and your credit history from public records, creditors and other reliable sources. These agencies make your credit history available as allowed by law. Credit agencies do not grant or deny credit; they just report on the data they receive.

Negative information is presented on a credit report for seven years with bankruptcy information reported for ten years. Hence, the credit report is an all-encompassing personal history of your financial management. Specific information includes:

  • Number of times credit applied for and with whom
  • Type of credit taken out in the past
  • Outstanding debt
  • Late payments in 30-, 60- and 90-day increments
  • Over extension of credit lines
  • Liens
  • Garnishments
  • Bankruptcy
  • Judgments

Under the 2005 FACT Act amendments to the Fair Credit Reporting Act, you are entitled to one free credit report per year from each of the three reporting agencies noted below. It is a good idea to take advantage of this to be certain your credit reports are accurate. For instance, you need to check that no questionable transactions have taken place and that any payoffs are reflected. Be aware that not all the data reported from each reporting agency is exactly the same. Your credit reports should be accurate to obtain a low mortgage interest rate or be approved for a rental house.

Go online to request your free credit report from each of these reporting agencies:

Look these reports over carefully and contact any agency reporting inaccurate information to dispute it or provide proof that a creditor was paid off. The key to moving into the home you want is a clean credit report.

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About The Author

Elizabeth R. Elstien has worked in real estate for over 15 years as a real estate...

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