The information in your credit report has a huge impact on whether or not you qualify for a mortgage loan and what interest rate a lender will offer. Therefore, it’s important your credit report reflects a positive image of the way you manage your money.

It is also important that you know what "credit score" means and which one is used for mortgage loan underwriting. If you are getting ready to buy a home, checking your credit report is the best way to ensure you get the loan and interest rate you deserve -- but it has to be the FICO score loan officers use. The factual data reports used for lending have a greater credit history than consumer credit reports and underwriters of mortgages reply on them.

The easiest way to see what’s in your consumer credit report is to contact the three national credit reporting agencies – Equifax www.equifax.com,
Experian www.experian.com and TransUnion www.transunion.com - and request a copy from each. That is because the three agencies are independent of each other and the information may differ on all three reports. In addition, you may not know which agency your lender will initially use to check your credit, so it is best to verify that all three have correct information about your credit history.

Be forewarned, though, that online monitoring of consumer credit scores are probably not the FICO credit score used by mortgage lenders when underwriting a mortgage application. The consumer version used by online internet companies do not collect data for mortgage lenders. The purpose is different. Consumer services track identity theft and useful information about judgments, liens, etc. that will need to be addressed even for a factual data credit report that is used for mortgage underwriting. When a mortgage loan officer accesses your credit report for the loan application, it is from a company that merges all three credit reporting agencies' factual data, encompassing more credit payment history, and that is the credit score upon which underwriters -- in behalf of lenders -- rely. A borrower's 620 consumer credit score may come out as a FICO 590 factual data tri-merged score mortgage underwriters use. The lenders minimum score may differ from the VA's guideline. Loan officers can help you.

If you've been denied credit, insurance, or employment because of information in your credit report from any of the three agencies, you can obtain a free credit report by contacting the agency within 60 days of receiving a denial notice. In addition, you're entitled to a free copy of your report each year when you certify in writing that (1) you're unemployed and looking for a job within 60 days, (2) you're currently on welfare, or (3) your report contains errors due to fraud. Otherwise, the agencies charge a fee for a copy of your report. Any fee paid for a credit score is probably the consumer credit score, not the factual data one used by mortgage loan underwriters.

For additional fees, each agency may offer you different report variations, such as:

• A credit report with or without your credit score.
• A three-in-one credit report that lets you see a side-by-side comparison of records, from all three agencies, with or without scores.
• Notification services when your credit history is requested.
• Routine notification changes to your file.
• Subscriptions that allow you to access your report on a regular basis.

New law promotes free access to credit reports
A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each agency provide you with a free copy of your credit report, at your request, once every year, from www.annualcreditreport.com. It is a consumer credit report.

Nonetheless, whether you are thinking of buying a home or simply curious about what’s in your credit report, it’s important to correct any errors you discover as soon as possible. Be sure not to rely on credit score monitoring that will not necessarily match or be near the factual data FICO credit score used for qualifying you for mortgage loan rather than for a consumer loan.  The affect on your credit score is greater when accessed for consumer loans (credit cards or car loan) than mortgage loans, and usually a loan officer will only access your credit once until, and unless, the lender does it again before closing to ensure no material changes affect its commitment -- like a huge new car payment that suddenly appears that might affect qualifying for the loan at closing.