There is a great deal of advice about preparing for a home loan application. If you are considering an FHA mortgage, FHA refinance loan, or even a reverse mortgage, you will need to take time to prepare for your FHA loan before filling out the application paperwork.
Part of that preparation involves pulling your credit report to make sure there is no identity theft, inaccurate information, etc. But how do you get copies of your credit report?
All consumers are entitled to a free credit report every 12 months. This report is available from each of the three credit reporting agencies; Equifax, TransUnion, and Experian.
The government consumer watchdog agency, the Consumer Financial Protection Bureau (CFPB), advises borrowers to apply for these credit reports via AnnualCreditReport.com. You are entitled to free credit report information once every 12 months from each of the three credit agencies, not one report from one agency every 12 months.
There’s a catch; these free credit reports do NOT include your FICO scores. These free reports are valuable to check the accuracy of your reports and make sure there’s no identity theft associated with your name at the time you pull the reports.
Borrowers who want to check their FICO scores may be able to do so via credit monitoring services offered by the consumer’s credit card servicer. CFPB warns that subscription-based “free credit score” services usually aren’t “free”-always read the fine print before signing up.
Why check with your credit card company to see if you can get free updates on your FICO scores or at least an initial read of those scores at the time the numbers are pulled?
According to the CFPB official site, “Creditors (including card issuers) generally have to disclose your credit score (and related information) if they use the score and…deny your application, increase the cost of your credit, or offer you a higher rate than other consumers get from that creditor.”
Those instances may not be applicable to you when you request your credit scores from a credit card servicer, but it helps to know this information in advance.
CFPB also advises consumers, “it’s important to check your credit report to make sure the information is accurate because your credit score is based on the information in your credit report. It’s also important to note that the score you purchase may not be the same as the one lenders use to decide whether to give credit.”
It’s useful to start checking your credit scores and credit report data as early as possible in the planning stages of your home loan or refinance loan. FHA loans are best when they are processed without surprises-checking your credit early helps avoid unexpected “discoveries” about your credit or other details.
If you need help with pre-loan planning, contact the FHA directly and ask them for a referral to a local, HUD-approved housing counselor. Call them at 1-800 CALL FHA.