Before applying for your loan, get a copy of your credit report. You can obtain a copy directly from a credit bureau or a company that will get you one from all the major credit bureaus. You can find these companies in the phone book under “Credit Reporting Agencies,” or on the Internet by searching for the same key words.
You are now entitled to one free credit report from each of the three major credit reporting agencies every year. You can get them online at www.annualcreditreport.com. Before ordering, read the information from the Federal Trade Commission at www.ftc.gov/ bcp/edu/pubs/consumer/credit/cre34.shtm.
If you need to obtain more than your one free report from each agency in a year, the cost for additional reports should be under $40, and even less if you go directly to the credit bureaus. If you have been refused credit based on your credit report, the credit bureau will give you a free report even if you have already gotten your free annual report. You will need the letter showing that you were refused credit. It is wise to get a report from all three bureaus because when you pull your credit history, each report may not contain the same information.
The three major credit reporting companies are Equifax, Experian, and TransUnion..
Examine the report for errors. Perhaps the credit bureau mistakenly put information about someone else on your report. Report any errors to the credit bureau. Get something in writing saying that the incorrect information is being removed, and save it. You can at least show the letter to your prospective lender. You may find that it is not easy to get the mistake removed. It may be temporarily removed and then show up again later. Having something in writing will make it easier to get the error removed a second (or third) time, if necessary. After making sure the information from each credit agency is accurate, you can get a good idea of your position as a borrower by checking one figure on each report, your credit score.