For most Americans, keeping up with your credit likely isn’t a high priority unless you’re in the midst of acquiring more credit or need to improve your credit for any number of reasons. Knowing where you stand with your credit can certainly be useful and it’s good practice to monitor it throughout the year.
There are lots of methods for monitoring your credit and reasons why you need to, so we’ve put together a list of a few of the why’s and how’s of keeping tabs on your credit.
Free Credit Reporting
We’re all familiar with the websites out there that claim to give you your free credit report each year; however, many consumers don’t realize that there’s actually a law requiring each of the three credit reporting agencies to issue a credit report at your request once per year.
Equifax, Experian, and TransUnion, the three major credit-reporting firms, each is required to issue you one free credit report per year at your request. What this means is you effectively get three chances to monitor your credit each year. Since you get one free report from each of the firms, we recommend getting one every four months in order to monitor your credit throughout the year.
If for any reason you were denied credit, you can actually request an additional free credit report from the reporting agency your lender used to pull your credit within 60 days of the denial. Getting denied for credit can put you in a bind if you’re not expecting it, so it stands to reason that you would make any remedies possible to reduce the chances of it happening again.
Unless you’re already monitoring your credit, then getting denied credit can be a big surprise. In the event you’re denied, your lender should provide you a denial letter with reasons why you were denied, what credit reporting agency they used, and instructions for how to request your credit report. Take advantage of this as another way to monitor your credit and make changes when possible.
Getting a Mortgage
One of the most crucial areas for you to monitor your credit is when you’re applying for a mortgage. Your credit can determine a lot during the mortgage lending process including if you get pre-qualified and what interest rate you will pay for said credit.
Since the housing crash of 2008, lenders are far more hesitant to give credit to borrowers with less-than-stellar credit scores and credit history. That said, it may behoove you to monitor your credit well in advance of applying for a mortgage and making changes to your credit in order to improve your attractiveness to lenders. Your credit reports will go a long way in telling you what you can improve and how to go about it.
Get Professional Mortgage Help
Part of what the loan experts at Tidewater Mortgage do is help borrowers find solutions for their particular buying situation no matter the state of your current credit. Get in touch with one of our loan experts today to discuss your options and get pre-qualified for a line of credit for your new home!