Do you ever wonder why there are so many commercials that advertise about consumers’ credit reports? I am sure you have heard the commercial with the jingle for FreeCreditReport.com. You either love it or you hate it! While there are many companies who offer this service, many people are not aware that AnnualCreditReport.com is the ONLY authorized source to obtain a FREE annual credit report under federal law, according to the Federal Trade Commission (FTC).

The three major credit reporting companies include Equifax, Experian, and TransUnion. All three companies must be checked for accuracy in order to get the full picture on your credit history and credit score. 

When purchasing a Pensacola, FL home your lender will establish a mortgage rate on your credit score. So, it is a great idea to check it and correct it (if necessary) before your lender sees it. Identity theft is another reason to keep a watchful eye on your credit report.

Lenders consider a credit score over 680 as a good score and will likely offer the applicant a low rate mortgage rather than the applicant who has a credit score less than 600. A low credit score will result in a mortgage at a higher rate. So, if your credit score is low, repair it! 

Inaccurate information on one of the credit reports can put your rating into a tail spin. If errors are found, a dispute should be filed with the reporting company, who is obligated to investigate the alleged error. If the reporting company determines the error is valid or if they are unable to prove the error in one way or another, they will remove that item off the report.

The FTC provides really clear and helpful information on how to obtain and repair credit scores. Go to their website at http://www.ftc.gov/freereports to see more on this subject. The FTC offers the following information on how to repair your credit score:

  1. Inform the consumer reporting company in writing. The letter needs to specifically state the inaccuracies, to include the facts explaining each dispute, and request that each discrepancy be removed or corrected. If you are unsure as to what to say in the letter, a “Sample Dispute Letter” is provided on the FTC website. Your letter needs to include copies (not originals) of any documents that will support your reason that the item is in error as well as a copy of the credit report showing which item is being disputed. As with any legal correspondence, you should send this letter Certified Mail, Return Receipt Requested, as proof of mailing. Also, before mailing your letter, make sure you have a copy of it and all of its enclosures for any future reference.

  2. Inform the creditor in writing about the disputed error. Don’t forget to include all supporting documents (copies, not originals) to support your reasons for the error. 

  3. Be persistent. The reporting company must investigate the dispute in a timely manner, which is usually within 30 days. Keep a journal of the timeline when all activities occurred through this discrepancy process. When the reporting company’s investigation is complete, they will provide you with the results of their findings – if the dispute results in a change to your credit report, a free credit report will be sent to you showing the correction.

So, what if there are no errors on your credit report, but you need to raise your credit score. There are a few ways to accomplish this, but it is not a quick and easy fix. It may go so far as to making a life altering change. Here is what you can do:

  1. Review your free credit report annually.

  2. Get rid of bad financial habits to include making late payments, taking on too much debt, and maxing out your credit cards.

  3. Keep credit accounts open, but significantly reduce credit balances.

  4. Make timely payments to your creditors. 

  5. Do not use a credit repair company. The FTC advises consumers to avoid credit repair services completely because these types of services are illegal. The bottom line is that it is an ultimate waste of money while you are left with the same credit score. 

  6. “Time heals all wounds.” Consumer reporting companies can report valid negative information for 7 years and bankruptcy for 10 years

The agents at Grand Realty, Inc. want you informed on the importance of having a high credit score. Your hard work and good financial responsibility is extremely beneficial, and you will reap its benefits when it comes to securing a mortgage for the purchase of a Pensacola, FL home.

Please call our agents today at (850) 512-1185 for more information. We look forward to hearing from you!

The Grand Realty Team