Timely news, information and advice concentrating on FHA, VA and USDA residential mortgage lending.

Vimeo Channel YouTube Channel

Watching Your Credit Before Applying For Your Home Loan

March 29, 2023

credit reports

If you are not monitoring your credit ahead of a credit application, especially a big one like an FHA mortgage or FHA refinance loan, you likely are not ready to apply for that credit.

You want to know what’s in your credit reports along with your FICO scores, and you need to review the accuracy of your credit report before the lender sees it.

Some believe this can be done by pulling annual credit reports. That snapshot of your credit picture isn’t necessarily what your loan officer will be reviewing at loan application time.

The lender will see the most current data available to them, and it’s not wise to leave things to chance when applying for a home loan.

Credit Monitoring Can Help

Credit monitoring is an important tool for the consumer. To use credit monitoring properly, your data should include information on the three major credit reporting agencies.What do these companies report about you? You’ll want data from:

  • Equifax
  • TransUnion
  • Experian

It is best to set up automatic alerts in an ongoing credit monitoring program that can notify you about any changes in those credit reports.

Don’t rely on the scores alone to tell you what kind of credit you have. There are other things to pay attention to. You’ll want to look for errors, outdated information, even identity theft reported in your credit history. FICO scores are not the only data your lender needs to approve or deny your FHA mortgage.

Credit Monitoring Is Important

Pulling an annual credit report is a great way to start monitoring your credit, but you won’t want to rely on that information alone.

Active monitoring is your best option. Annual credit reports may be helpful but they are not the correct tool you need to avoid errors staying on your report, identity theft, or other credit-report-related issues that could hinder you when it is time to apply for your FHA mortgage.

Credit monitoring should include fraud alerts you can place on your credit report. A victim or potential victim of identity theft can use such alerts to notify potential creditors to go the extra mile in confirming the identity of the applicant.

Should You Pay For Credit Monitoring Extras?

Depending on which company you choose, there may be additional subscriber features (for an extra fee) such as identity fraud insurance. These are optional and before spending extra money on these features, research them and compare them to similar options. Are they worth the expense?

In some cases, they might be, but in others, you may be better off saving your cash.

Know before you commit, and remember that you won’t need the extras just to keep track of your basic credit report data.

Joe Wallace - Staff Writer

By Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

Connect with Joe:


Browse by Date:

About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

5850 San Felipe Suite #500, Houston, TX 77057 281-398-6111.
FHANewsBlog.com is privately funded and is not a government agency.

Share This