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Mortgage:
Your First Mortgage
Credit Rating and the Fair Credit
Reporting Act/ FCRA
The
FCRA and Credit Rating: What They Can Do
for Mortgages
Let’s
explore the importance of your credit
rating further.
A home
mortgage (usually involving a bank but
not limited to it) is simply a pledge or
commitment in which a homeowner offers
the title of his property as a form of
security for a loan – you place your
home as the collateral. When you get
your loan, you are required to pay a
certain amount at different intervals,
depending on what is agreed upon, and if
you don’t, you could potentially lose
your home.
However, not everyone can easily get a
loan, especially from big banks and
financial centers. Think about it – you
yourself would be hesitant if a complete
and total stranger came to you and asked
to borrow some money, right? That is
right about the same case when it comes
to borrowing money from a bank or
lender.
How do
you go about securing a loan? You have
to apply for it, which is no guarantee
that it will be granted. Banks,
financial companies, and other lenders
will have to consider carefully your
profile, particularly something called a
credit rating.
Credit
rating
A
credit rating is something that is drawn
up from credit reports, which details
your credit activities such as
borrowing, debt, payments, etc.
Basically, the credit rating details the
amount of credit that can be lent to a
person without unwarranted risk. This
essentially means that the higher your
credit rating, the higher the loan
amount you can get.
To get
a good credit rating, which entails that
the chances for you getting a loan
(including the amount you need) are much
higher than normal, you simply need to
pay your bills and loans on time, as
well as other financial obligations. A
good credit rating is obviously much
better than a lower one, since your
financial opportunities are much wider
than when compared to having a low
rating, which severely limits what you
can do financially.
Credit
reports
It was
mentioned that the credit rating comes
from credit reports, so you might be
asking, what are credit reports? They
are actually the ones where your credit
activities are recorded – including
loans, balances, unpaid debts, along
with a little bit of background
information. These credit reports are
gathered by credit bureaus, also known
as a consumer-reporting agency.
You
might be wondering why such agencies
exist – basically they are there to
stabilize the financial market. Also,
there is no need for you to worry, as
they exist legally, with the knowledge
of the government, including what they
do. In fact, there is a law called the
Fair Credit Reporting Act (FCRA).
Fair
Credit Reporting Act
This is
a federal law which regulates consumer
credit information. By regulating this
consumer credit information, credit
ratings can then be properly given out
with most, if not all, of the
information at hand. There are certain
rules and regulations that the consumer
reporting agencies have to follow, which
are found in this particular federal
law.
This
law is actually beneficial to the
consumers, the consumer reporting
agency, and the lenders. This law makes
clear some of the potential problems
that may arise between consumers and
their credit rating, and tries to
prevent that from occurring. Consumers
themselves are entitled to one free
credit report per year, thanks in part
to the Fair Credit Reporting Act.
In summary, you may
probably want or need to get a loan via
a home mortgage. If that were the case,
it would be in your best interest to
have a good credit rating that is
reflected on a very positive credit
report. Since the credit rating and
credit report are taken into great
consideration when applying for a loan,
the amount of credit rating you have
proves to the lender how good you are
when it comes to dealing in finances.
Table of Contents
Credit Report News:
Live Search: credit report site:msnbc.msn.com
Search results
10 Tips: Fix credit-report errors - 10 Tips - MSNBC.com
Have you ever been horrified to discover errors on your credit report? Such inaccuracies can and should strike fear into any conscientious consumer?s heart. Here are some helpful ...
How can I get my credit report for free? - Answer desk- msnbc.com
Answer Desk readers seem to spend a lot of time wondering (and worrying) about their credit rating. Chris in North Carolina wants to find out what the credit bureaus are saying ...
Credit reports still a mystery, GAO finds - Online Banking- msnbc.com
While consumers are very aware of credit reports and scores, many don't understand factors that negatively impact their financial report cards, according to a report issued by ...
Glitches mar launch of free credit report site - Personal finance ...
Consumers eager to learn about their credit history began asking for free copies of their credit reports Wednesday, but some said they were having trouble using the Web site built ...
Free credit reports may reveal surprises - Online Banking- msnbc.com
... com. Federal law signed by President Bush last December required the nation's three credit bureaus to give consumers free access once a year to their credit report, an essential ...
Experian settles free credit report charges - Personal finance- msnbc ...
Credit bureau Experian has settled charges that it misled consumers with the lure of a free credit report and instead enrolled them in costly credit monitoring services, the ...
Which is worse: foreclosure or bankruptcy? - Answer desk- msnbc.com
What is better on your credit report - foreclosure or bankruptcy? -- D.F., Address withheld Neither option is going to be easy. Generally, a foreclosure will remain on your ...
Many free credit reports still aren't free - Security- msnbc.com
On June 1, consumers living in the south will have the right under a federal law to get a free copy of their credit report. But if they aren?t careful, they might end up paying ...
Tips to keep your credit report clean - Money Matters - MSNBC.com
Does canceling a credit card really affect your ability to borrow money from a bank? In an effort to separate fact from fiction, TODAY financial editor Jean Chatzky shares tips for ...
Credit where credit is due ? or not - Money Matters - TODAYshow.com
I have obtained a copy of my credit report. I have two outstanding bills for approximately $500 each (Con Ed and Sprint). Is it best to make a one-time payment in full to settle ...
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