When it comes to qualifying for a home loan, credit history has become the most important underwriting factor. The automated underwriting procedure used by both Fannie Mae and Freddie Mac, the nation's 2 largest mortgage funding organizations, weighs the underwriting decisions mainly on numerical credit scores assigned by the three major credit bureaus. These three repositories, Equifax, Experian, and Trans Union, gather financial information on 190 million consumers in the US and assigns a numerical score based on their computer model.

 Your credit score and report and make the difference between approval and denial. In some cases, lenders will modify the rate &/ or terms of the loan, for those with previous credit issues.

 The Public Interest Research Group recently conducted a survey and concluded that 70% of all credit reports contain incorrect information. Of those reports examined in 1998, 29% contained errors serious enough to warrant loan denial, an increased interest rate, or change in loan terms.

 Some of the factors that can greatly affect your credit score for the worse include:

1. Late payments during the previous 24 months.

2. Current or previous bankruptcy, repossession, lien, foreclosure, charge-off, judgment, or collection.

3. High percentage of outstanding debt compared to available debt.

4. Multiple credit inquiries during the past 120 days.

 If you would like to request a copy of your credit report, you can contact the following credit bureaus or click on the hyperlinks to learn more:

Depending on where you live you may also be able to order a free copy of your credit report from www.annualcreditreport.com.