“I don’t have a problem with my credit report,” a potential new home buyer says. “I pay my bills on time. I never have trouble getting a loan.”
That may be true. However, according to several surveys, most people are surprised by at least one piece of information in their credit report. And it only takes one derogatory item to create an obstacle to getting the lowest mortgage rate possible, or even getting a mortgage at all.
That’s why it’s important to check your credit report before you shop for a new home. You will then have the opportunity to deal with any unexpected issues. For example, you may discover an error, which is not unusual. If you do find a mistake in your credit report, tell the credit bureau immediately. They are required, by law, to promptly make a correction. If there are late payments noted on your credit report, you can write a letter of explanation to the credit bureau telling your side of the story. This will go with the credit information that goes to your lender. Assuming everything else in your credit report is fairly good, most lenders will accept a reasonable explanation for late payments, such as being laid off from a job, an extended illness in the family, or military service overseas.
How do you get your credit report? There are two national credit bureaus in Canada:
• Equifax (www.equifax.com)
Both have websites that allow you to order a free credit report by mail (the links above with take you to that page) or for a fee on-line. It’s a good idea to order credit reports from both as you want to make sure both have the correct information. Getting your credit report, and checking that it’s accurate, will make the home buying process go a lot more smoothly.