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When buying a home, you have a lot to consider and deal with. You have to find the home you want, deal with tons of paperwork, and choose a mortgage lender that will see you through each step in the process. As any current homeowner can tell you, a major part of buying a home will also be your ability to understand your credit score. A simple error on your credit report can make or break your success at getting the home you have always dreamed of owning. Do you know how to understand your credit report or how to dispute items that you feel are mistakes?
At First Savings Mortgage in D.C., we understand how confusing it can be. Therefore, we have practical advice on disputing the errors on your credit report, since even that can be a process.
Understanding Your Credit Report
Your credit report will show your past credit history. Your credit history is reported by anyone who has extended credit to you in the past. It will tell lenders the types of credit you have used, how long past accounts have been open, and whether you often miss payment due dates. It is the information that makes up your overall credit score. This is important for lenders because it enables them to see how much of your available credit you have used.
Your personal credit score report will show both hard and soft inquiry information. Soft inquiries are the times you request your own credit report or when a potential lender checks to see if you may be pre-approved for credit. It may also be from an agency that you already have credit with because they wish to review your credit.
Hard inquiries on your score only happen if you apply for credit. Every time you apply for a line of credit it will stay on your report for 24 months, which does impact your overall score.
Your Credit Score
Every loan, whether for a new couch at a furniture store, a student loan that has a high remaining balance, or a personal loan from your bank will appear on a report. This report will be generated by one of three credit bureaus and every credit company will look at the one they prefer to use. They are Experian, TransUnion, and Equifax. Every payment that you have made on time and the length of time that it has been an open account will add positive points to your overall score. Late payments and newly opened credit accounts will take points away from your score. Your score will also show your personal information, including your birth date, address, name, and Social Security number.
Let's say that you get a copy of your credit report, which is easily accessible by all three credit bureaus. Check it over thoroughly. Think back carefully about whether you remember that credit card company or that negative mark that may show up. You should also check to make sure that your address, both current and past are accurate, your birth date, your name, and Social Security number are right.
If it shows that you had a line of credit that you are unsure is accurate, you can dispute it.
Disputing Errors
When applying for a home loan, you will want to check all three credit bureaus for errors. If your report shows that you have a credit line with a business that you do not know about, you should contact the business directly as a first step. Their contact information will be on your credit report. From there, you should inform the credit bureau. Our goal is to help you understand the dispute process, which can be kind of difficult.
Equifax
If you notice an error on Equifax, the first thing you will need to do is file a dispute. You can contact Equifax by phone or mail. If you have proof that there are errors, you may also send documents to them via online upload or through the mail. After you have submitted a dispute, your credit score may change if you have substantial proof that there is an error. Otherwise, an investigation will be done into your dispute. If you prefer to call, you can at 1-866-349-5191.
TransUnion
You can find the dispute form for TransUnion online. You will need to create an online account if you do not already have one. This will allow you to easily file and keep up with the investigation into your credit history. If you have questions, you can contact TransUnion at 1-800-916-8800.
Experian
To dispute a report that shows on Experian, you can fill out the form online. You will need to answer basic questions and explain what you are disputing. If you need assistance, you can call 1-866-200-6020. You can also use an online form to seek help and information.
No matter which of the three credit bureaus you have found an error on, you can use your credit report to start the process. Simply circle the item that is wrong, add an explanation of why you feel it is wrong, and if possible, show proof of why it is wrong.
If an investigation is necessary, most of the time they are completed within 30 days. However, in instances of identity theft or other major issues, the case may go on a little longer.
We Are Here to Help
First Savings Mortgage in Washington, D.C. understands that your goal is home ownership. We strive to make it as easy as we can for everyone. If you need more help, our agents will be happy to further guide you. Simply contact us, and we will do all that we can to help your homeownership dreams come true, even if it means helping you clean up your credit report first!