Improving credit history before applying for a mortgage loan
Money Matters
- Posted:
11/24/2009
Mortgage providers always check your payment history through credit bureaus before passing the loan. Therefore, I always advise my clients to clean up the account from not one but all three bureaus to make the loan approval easier and quicker.
The first step in improving your credit records is to get a copy of
credit reports from all credit bureaus. You are entitled for one free annual report from all three credit bureaus. Some mortgage providers do give out loans by checking credit score from a single credit bureau, but those are adjustable mortgages.
Once you have the
credit report with you, it becomes easy to spot and eliminate the negative items from the report. You can adopt two ways to remove negative items:
Through phone call:
You can call up your credit bureaus and ask them to remove the negative item from your credit report. Of course, be prepared to hear No as a first answer. Stay calm and do not get agitated when the customer care representative keeps giving a negative answer. Emphasize consistently on having the items removed from your credit report and ask for the supervisor if necessary. Most importantly, note down the details of the conversation such as the date, time, person you spoke to and the conversation you had.
You must ask the credit bureau to send a letter, which states that the bureau is correcting the negative information from the
credit report. The letter is your evidence in case there is a delay or the company forgets to remove the negative item. With the letter in your hand, you can confront the credit bureaus and they will remove the negative item from your credit. Additionally, the letter will help mortgage provider confirm that proposed changes are in pipeline and your credit report will improve soon.
Through a letter:
If the phone call doesn’t work, you may want to dispute your case by sending a letter directly to the credit bureaus. The letter should include name, phone numbers, signature, social security number, address, disputed items, and account numbers. Inform your credit bureau that you are disputing the item. Ensure that you have a receipt back from the credit card issuer stating that they have received your letter.
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