Mortgage: Your First Mortgage

How To Build A Lender-Friendly Credit Report 

Successfully Building a Lender-Friendly Credit Report

When seeking a mortgage loan we can’t emphasize the importance of credit worthiness enough.   

Logically, lending institutions would first want to know the person they are lending money to, because there is always the risk that they will not be paid back, or will receive incomplete payments. This is the reason why there are credit reports. These credit reports are simply records and listings of credit activities, including credit card accounts, past and present loans, unpaid balances, and even how quickly you pay your bills and debts. 

Credit reports ultimately affect your credit rating, which the lenders look at when deciding whether or not to loan you money, including how much. These credit reports come from consumer reporting agencies, which are bodies tasked to collect and properly distribute to the proper recipients these reports regarding the consumer. Don’t worry, these credit reports cannot be distributed to just anyone, or else they would be in violation of federal law. 

In order to have a greater chance at securing a loan, your credit report and rating must be in good standing. Take note, it is not the consumer reporting agency that declares whether you can get a loan or not – it is the lenders themselves. The consumer-reporting agency merely provides the necessary information to give the lenders some background about the person asking for a loan. 

A credit report usually contains identification, credit information, public records, and recent inquiries. Identification contains any relevant information including name, address, work history, etc. Credit information contains any credit card accounts, credit limit, bills paid and unpaid (if any), and the like. Public records are simply any state or county records while recent inquiries are those who have acquired your credit report within the past year. 

In order to build a lender-friendly credit report, these factors must be addressed and should reflect your good standing. These parts of a credit report should complement each other and show that you are basically a person to be trusted with the money that they lend. Any suspicious data that they find could potentially be the key to the lenders not approving the loan. 

For the identification part of a credit report, they will take a look at your work history, so if you have job instability, it will reflect on your credit report and would likely discourage them from loaning you money. It would be better if you stick to a job for quite some time before changing work. They will also take a look at the companies you’ve worked for, if these are in good standing as well. 

With regard to credit information (which is perhaps the most important part of the report), you should make sure to pay any bills on time – electricity, water, telephone, cable, etc. Unpaid bills are a big discouragement to lenders, including any previous loans that you may have paid in full, but after the agreed-upon time. If they see that you are a responsible person when it comes to finances, you have a better chance of securing a loan, also with a higher amount. 

Public records are usually used to see if you’ve been paying your taxes properly. This, like credit information, shows them your responsibility in financial dealings. They will also state if you have filed for bankruptcy and the like. 

The deed of your home (to be used in home mortgages) is sometimes not enough for the lenders – they actually want to look at your credit report and deduce if you are able to pay the loan, and if you’re good in handling finances. If you have a good credit report and subsequently a good credit rating, a loan or home mortgage is not as difficult to obtain. It is important to keep in good standing financially, since consumer reporting agencies are observing you carefully.

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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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