25% of Credit Reports Have Errors

With so many of us affected by the economic downturn, and the tightening of credit, it is more important than ever to have a look at your credit score and what it means to you.
Here are some key points as well as an accurate and FREE way to pull your credit.
Who are the credit bureaus?
There are three Credit Bureaus – Experian, Trans Union, and Equifax. The three report to FICO and FICO generates the score that mortgage lenders and automotive company’s use to deterine your risk and essentially your interest rate.
However, not all lenders or credit companies report to all three, so getting a credit report that pulls from each agency is very important to makes sure everything in your name is reporting correctly with each agency.
Here is an example of how having good credit can impact your monthly mortgage payment for a $300,000 mortgage and the interest rate you qualify for:
Good (Fico score of 720 or higher) APR of 6% Monthly Payment $1,798.
Bad (Fico score of 600 or lower) APR of 9% Monthly Payment of $2,414.
So having a bad credit score and higher interest rate over 30 years cost you $220,000 more on your mortgage!
Will talking to various car dealerships and/or mortgage companies hurt my credit?
You will not affect or lower your credit score if you rate shop while looking for a car, mortgage or school loan. The credit reporting agencies give you 30 – 45 days to rate shop and all of those inquiries will only report after 45 days as 1 inquiry.
How can I get my name off the list so I don’t get blank checks in the mail that say I am pre-approved just sign here?
If you do not want to receive solicitations in the mail about qualifying for a credit card, or get blank checks offering you money then go to optoutprescreen.com and opt out so that the credit agencies can not sell your information to other companies.
How does shopping for consumer items affect my credit?
When applying for a mortgage today, be prepared that the lender will want written explanation of any credit inquiries for the last 6 months. So thinking of buying a refrigerator, new sofa, dining room table with 0% financing? Wait to do that until you close on your new home! These types of inquiries can NEGATIVELY IMPACT YOUR CREDIT AND ABILITY TO GET A MORTGAGE. 
I have heard that my credit may be pulled again the day before I purchase a home…Why?
There is some discussion that Fannie Mae could require that all borrowers have their credit re-pulled the day before closing to verify credit score. Because the agencies all update the data at different points in the month (some weekly, some monthly, etc) this means your credit score is changing daily and could cause major delays and problems for buyers right before closing on their new home.
How can I get an accurate report on my credit and for free?
AnnualCreditReport.com is a reputable source that is owned by the credit reporting agencies and the most secure place to pull you FREE CREDIT REPORT EACH YEAR. Make sure you do this at least once a year to protect your self against fraud and incorrect recordings.  If you do find discrepancies on your credit, you should immediately start the appeal process. Some of the larger lenders, such as Wells Fargo offer this as a service to their existing customers and even have a way to rescore your credit quickly with a system called RAPID rescore.  If you handle yourself,  most of the time you will be successful in the appeal within 30 – 45 days. As you often find, you are your best advocate…you just need a little time and patience.
In summary, everyone should check their credit report once per year.  Don’t wait until you are making a major purchase such as a home or automobile to find out that you have discrepencies on your report.
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