I've made a decision to buy a house, what can I do get my credit in order before I decide on the house/lender

Answer 1

Review your credit report. Dispute any errors to the credit bureau.

Contact any negatives and work out settlement. You can pay 50% to 75%. Lump sum gets better deals. Any payment plans have to be short termed. Get any settlement agreement in writing and ask that the item be deleted from your credit report. If the won't remove it, it's still better to show paid. Don't give collectors access to your bank account.

Pay any credit card balances down to less than 30% of available liimit -- paying in full is even better.

Make sure you pay all your bills on time. You need at least a 2 year on time history.

Put money aside for a downpayment. And don't buy more house than you can afford. Your mortgage payment should only be 25% of your month pay.

Answer 2

Order a copy of your credit report from the credit reporting bureaus (Equifax, Experian, and Trans Union http://www.consumersunion.org/finance/credit-report03.htm) and review it. If there are any discrepancies, contact the company who reported the discrepancy and find out what it takes to get it straightened out.

Discrepancies might include credit accounts taken out that you are unaware of (identity theft), accounts that show late payments when you made the payment within 45 days of the due date (a credit company can't report a late payment on an account unless the payment is more than 45 days past due), inaccurate balances on open credit accounts, etc.

By law, the credit reporting bureaus are supposed to provide you with one free credit report each year. They may be a bit confusing (well, actually, a lot confusing) to decipher at first. Find a lender or mortgage broker who is willing to go over your credit report with you to decipher it and find out if there are any discrepancies if you can't figure it out yourself. They'll help you. They want your business.

Answer 3

Just make sure you have enough money for a down payment. Lots of young people don't realize they cannot just go out and buy a house. A down payment is about 1/3 of total price. Each lender may be different. Good luck

Answer 4

If you have as little as 3% down, you can probably purchase. 5% is better. 20% is really great!

You can get your credit report at: http://www.annualcreditreport.com

It won't give you scores for free, it is about $8 to look at scores, but you can check the status of your accounts and make sure there are no discrepancies.