Finances

Step one: Finances

The first step is to pull a copy of your credit report. This needs to be done months in advance of looking for a home. Why months in advance you ask?

Errors on credit reports are common. Once you identify an error that can effect your credit score or even prevent you from qualifying for a loan at all, you will start the process of trying to get it removed from your credit report.

First, call the company that is reporting the negative information and ask them to remove it from your credit report. You need to work directly with them to determine that the debt truly was not yours.

If they agree to remove it, be sure to ask them to send you a clear credit letter. Once the company reporting the incorrect information contacts the credit reporting agencies, it can still take 60 to 90 days before they will remove the negative information from your credit file. If you apply for a loan prior to having the negative information removed, the mortgage company will ask to see your clear credit letter. However, your credit score will still be impacted and your interest rate could end up being higher.