Homebuying is complicated, and purchasers have to tread lightly to ensure nothing goes wrong.
In fact, before they even start shopping, buyers should investigate if anything is already wrong — in their credit report.
New procedures used by credit-reporting bureaus promise to make it easier to set wrongs right.
But getting mistakes cleared, and perhaps boosting your credit score to qualify for a mortgage, also depends on how well you can communicate, says experts.
Here’s why: Last year, the three major bureaus — Experian, Equifax and TransUnion — changed the way they transmit a consumer’s complaint to the credit issuer involved. Now, the issuer — say, an auto loan or credit card company — must review the consumer’s written explanation, in addition to any supporting documentation, says Norm Magnuson, vice president of the Consumer Data Industry Association, a trade group.
Previously, consumers’ documentation may not have been reviewed by the issuer. Instead, a code that the bureau assigned to describe the reason for the mistake may have been all the issuer looked at, explains Gerri Detweiler of Credit.com.
The change is good, notes Rick Palandri of Republic Mortgage Home Loans in Chicago, who says he’s seen disputes quickly resolved, “assuming the buyer has the exact information required by the creditor.”
“Let the creditor know you know exactly what happened and that you have the documents to back it up,” adds John Oldshue of LowCards.com.
A sample dispute letter is available at myfico.com.
You’ll want to start checking your credit report early — about 60 days before beginning home shopping, says Magnuson. Once a year, request free copies of all three of your credit reports at annualcreditreport.com.
Many buyers now begin their house hunting by seeking pre-qualification or preapproval — or pre-underwriting — and may often be given copies of their credit reports during that process, concludes Palandri.
— Marilyn Kennedy Melia
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