Fixing Credit Report Problems Ahead of Your FHA Home Loan

July 2, 2019

If you are planning to apply for an FHA home loan or any other type of mortgage, you will need to review your credit report long before you start filling out loan paperwork. 

One of the most important reasons to start early, aside from saving up for the down payment and other expenses, is to check your credit report for errors or evidence of identity theft.

Don’t bother wasting money on third-party services offering to fix your credit; you should personally review your credit reports from all three major reporting agencies; Experian, Equifax, and TransUnion. All consumers are entitled to a free credit report from each of these agencies once per year.

When you look over your credit report, you will want to start by ensuring you don’t have identity theft evidence building up on your report. If you do find transactions and accounts you do not recognize, you’ll need to report that to the credit agency, file police reports, and cooperate with the investigation into your findings.

But there are other things you should review on the credit report, too. The Consumer Financial Protection Bureau say to examine your report for a variety of issues including:

• Wrong name
• Errors in your phone number or home address
• Credit information that belongs to someone with the same or similar name
• Errors with regard to any credit account status (open, closed, etc.)
• Errors in account balance information
• Accuracy-accounts incorrectly listed as late/delinquent
• Incorrect dates for payments including most recent payment and/or payoff amounts 
• Incorrect date opened, or date of first delinquency
• The same debt listed twice or more
• Reinsertion of incorrect info after a prior correction
• Accounts appearing multiple times with different creditors listed

You should dispute any mistakes on the credit report even if they do not appear in the list above. Correcting mistakes on the report is crucial and it may take longer than you think to accomplish. That’s one reason why it pays to start early.

Some third party credit repair agencies will offer to dispute these things on your behalf, but you do not have to pay to do so, you can dispute them yourself for free. You should also avoid any so-called credit repair agency that offers to remove accurate information from your credit report.

They cannot do this.

If you are concerned about your ability to credit qualify for an FHA mortgage, talk to a participating lender and ask some advice about your potential to qualify for an FHA mortgage and what can help get you closer to loan approval.

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