What is Credit Rating? Why is it important?
Credit scoring is a system creditors use to help determine
whether to give you credit.
Information about you and your credit experiences, such as your bill-paying
history, the number and type of accounts you have, late payments, collection
actions, outstanding debt, and the age of your accounts, is collected from your
credit application and your credit report. Using a statistical program,
creditors compare this information to the credit performance of consumers with
similar profiles. A credit scoring system awards points for each factor that
helps predict who is most likely to repay a debt. A total number of points — a
credit score — helps predict how creditworthy you are, that is, how likely it
is that you will repay a loan and make the payments when due.
Because your credit report is an important part of many credit scoring systems,
it is very important to make sure it’s accurate before you submit a credit
application. An amendment to the federal Fair Credit Reporting Act (FCRA)
requires each of the major nationwide consumer reporting companies to provide
you with a free copy of your credit reports, at your request, once every 12
months.
To order your free annual report from one or all national
consumer reporting companies, visit
www.annualcreditreport.com, call toll-free 877-322-8228, or complete
the Annual
Credit Report Request Form and mail it to: Annual Credit Report Request
Service, P. O. Box 105281, Atlanta, GA 30348-5281. The form is at the back of
this brochure; or you can print it from ftc.gov/credit. Do not contact the
three nationwide consumer reporting companies individually. They provide free
annual credit reports only through 877-322-8228,
www.annualcreditreport.com, and Annual Credit Report Request Service,
P. O. Box 105281, Atlanta, GA 30348-5281.
For more information, see Your Access to Free Credit Reports
at ftc.gov/credit.
I’ve had bad credit, and I don’t have much for a down payment. Can I become a homeowner?
You may be a good candidate for one of the federal mortgage programs available. Start by contacting a HUD housing counseling agency in your area. In addition, contact your local government to locate any local homeownership programs that might be available to you.
How can i get credit counseling?
Credit Counseling is available to those who might need help to regain control over their debts. If your debts are too high, credit counseling can help put you back on track so that one day you can own your own home.
The link below will take you to HUD-approved Housing Counseling Agencies who can best help you determine your housing needs. This site will also explain the different housing and loan options available to you in your area.
|