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Fixing credit mistakes can help you get better rates.
When you research the steps to buying a home, undoubtedly the first and most important step is to check your credit.
Checking your credit before the process of searching and purchasing a home begins allows you to get an understanding of your own financial situation and what to expect when it comes to lending and rates.
Another important reason to check your credit before you start looking for a home is to correct any mistakes.A shocking CBS study shows that nearly 4 in 5 credit reports contain a mistake.
While over half contained misspelled names or incorrect social security numbers, a whopping 30 percent contained inaccurate information about the status of closed accounts.Discovering a mistake on your credit score too late can cost you a better rate or even the home of your dreams.
The three credit bureaus are required to provide individuals a free copy of their credit score once every 12 months. Visit annualcreditreport.com and follow the steps outlined in this article to view your free reports.
So you’ve taken the first step and received your scores from the three major bureaus. If everything is correct you now have a solid idea of where you stand financially but if you find a mistake, what do you do next?
The first step in correcting your credit report is to notify the specific bureau in writing about the disputed information. Include copies of any necessary documents as proof of the mistake as well as a printed copy with the mistakes highlighted.
Send your letter by certified mail with a return receipt requested so you can be sure to have record of the notification. Be sure to include your identifying information like full legal name and address to connect the right account.
If you’re wondering how to format your dispute letter, check out this sample that can be easily changed to correct a multitude of problems.
Once the dispute has been reviewed, one of a few things may happen. In the best-case scenario, the mistake will be corrected and your score will be adjusted to reflect the changes.
The credit bureau is required to investigate and forward all new evidence to the company the inaccurate information came from. Not only will they require the mistaken company to correct their records, you can petition the bureau to send a revised copy to anyone who has requested a copy in the last 6 months.
If the bureau investigates and cannot find conclusive evidence supporting your claim, your score and file will remain the same but you can petition to have a statement of your dispute included in any future reports, although this will most likely incur a fee.
Even if you think the mistake is minute, it is best to contact that credit bureau immediately to correct them so you don’t run into any problems when it comes to the important moments in your life like applying for a job, car loan or buying a home.
One Comment
Second mortgage or home eequtiis do show, when recorded and this is the issue. I used to work for a title company for a major lender and issues do arise. Some lenders send the home equity to be recorded themselves, lenders don’t know all the variables that go into a recording, they miscaculate fees, don’t know about cover pages, maybe there’s a dual tax id and it costs more, some states only accept single sided mortgages. Maybe the county rejects the mortgage as the font is too small, the notary stamp bled through the paper, or there is no stamp or seal at all. If it’s rejected, the county sends it back to the lender, who most times thinks the mortgage is recorded until the borrower goes to refinance and the he is not on record so it takes them 6-8 weeks to go to their vault where they hold everything to either figure out the mortgage was not recorded or they don’t have it at all.I don’t know why people like home eequtiis, for some it’s a status thing ..I have a 500k home equity ..some need money quick and dont understand the full economic process and think home eequtiis are a good deal because the rate is low. Like any other mortgage product, home eequtiis have their usefullness, but it’s not for everyone or every situation