What Your Credit Report Says About You

A credit report is a complete history of all your financial activities. It lists your creditors, when you opened your bank accounts, what you owe and to whom, your credit limits and history―including late payments and any other negative information―your employment history, marriages, divorces, child support history, bankruptcies, property liens, whose name is on what, etc.-it's all there. When lenders request information, this is what they get, and you want to make sure it is in great shape.

Credit Scoring

This process gives a numerical value to all aspects of your credit history, factoring in your income, your debt, and your employment history. The past six to twelve months is examined first, so it's critical to keep current with your bills. Here's how the most popular type of score-the FICO-breaks down:

760-850: Acceptable risk. Someone with a score in the high 700s and up to 850, which is a perfect score, is in the best position to get the best interest rates.

675-759: Generally acceptable risk and may compensate for other less attractive aspects of your financial past.

620-674: Motivates a closer look at potential risks and may inspire a request for credit documentation and letters of explanation.

500-619: This lower score may keep the best loans and terms out of reach, as interest rates for these scores are high.

Below 500: Any score down here falls into the sublender category.

When it comes to mortgage rates, you'll see that a higher score makes a real dollar difference.

Obtain Your Credit Report

If you don't have a current one, get your credit report now. If there are problems, you need to know about them and address them before you even think about buying. Any serious problems, and sometimes even minor mistakes, can take months to repair.

There are a variety of ways to get your report. You're entitled to a free credit report once a year under the FACT Act; just go to www.annualcreditreport.com to retrieve it. You can also obtain one from each of the three large credit bureaus:

Equifax Information Services
P.O. Box 740241
Antlanta, GA 30374


2 Baldwin Place
P.O. Box 1000
Chester, PA 19022

The easiest way to access your report right away is to go online at the above-mentioned Web sites or freecreditreport.com. You will also want your credit score, which is the number that reflects your creditworthiness. In addition to the credit bureaus having their own scoring system, the Fair Isaac Corporation also puts out scores based on its own formula. Known as FICO scores, these are also important to obtain because most lenders will look at them as well. In fact, more than 75 percent of all mortgage companies today accept only FICO scores, and 90 percent of the largest U.S. banks use FICO scores. You can go to www.myfico.com and obtain a report from two of the big bureaus and get your FICO scores, too.

Note: we all have three FICO scores-one from each of the three major credit reporting agencies. Experian markets and sells the PLUS Score on its Web site. TransUnion sells the TransRisk score under its TrueCredit brand. Equifax is the only bureau Web site where you can order your FICO score directly; Equifax's score is marketed as Score Power.

I know that all sounds like a bunch of jumble and initials, so to avoid any confusion, I recommend obtaining your FICO scores (from all three bureaus) directly from www.myfico.com.


Michael Corbett is Trulia's real estate and lifestyle expert. He is also the host of EXTRA's Mansions and Millionaires on NBC. In addition to his regular segments on ABC's The View and Fox News, he is a national best selling author with three critically acclaimed real estate books:Find It, Fix It, FLIP IT!; Ready, Set, SOLD! and Before You BUY! His years of experience in buying, renovating, and selling homes have made him a sought-after nationally recognized real estate expert.