 TITLE: How to Get Your Credit Ready for a Mortgage CONTENT: Check Your Credit Reports and Scores\n------------------------------------\nThe first step in prepping your credit for a mortgage is learning where your credit currently stands. That means checking your scores, and getting your credit reports from all three credit bureaus (Experian, TransUnion and Equifax) to review the factors affecting them. You can get a free credit report from Experian, Equifax and TransUnion at AnnualCreditReport.com.\nReview each credit report carefully to make sure it accurately reflects your credit history. If you get all three reports at the same time, don't be surprised if there are minor differences between them. Your lenders may not report all of your accounts to every credit bureau, or may send updates to the credit bureaus on slightly different schedules. So there's no need to be alarmed if, for instance, your Experian report reflects the most recent payment on your credit card but your TransUnion report doesn't show it yet.\nHere are some things to look for when you get your reports:\n*   High account balances relative to your credit limits. Paying down your balances will help your credit scores.\n*   Past-due accounts, charge-offs and accounts in collections. If possible, bring all accounts current and pay off any outstanding collection accounts.\n*   Loans or credit accounts that shouldn't be there (which could indicate criminal activity), and payments incorrectly listed as late or missed. If any inaccuracy exists, follow the dispute process for the relevant credit bureau as soon as you can.\nAt the same time you're checking your credit reports, it's a good idea to take a look at your FICO® Score☉ (which you can get for free from Experian and other companies). A credit score distills the contents of your credit report into a three-digit number, so if there are improvements made in your reports, your score will likely increase once that information is reported to the credit bureaus. Credit scores play an important role in determining whether you qualify for a mortgage—lenders may decline applications from individuals whose credit scores are too low. Lenders also use credit scores to help set the interest rates they charge, with higher credit scores typically translating into lower interest rates.\nFor example, say you start out with a FICO® Score of 675. According to the FICO® Loan Savings Calculator, you could purchase a $300,000 home with a 20% down payment (total loan amount of $240,000) and qualify for a 30-year fixed mortgage with an interest rate of about 3.04% at national rates as of mid-November 2020. Boosting your score just a few points, to 680 or more, could qualify you for an interest rate of 2.83%—saving you nearly $10,000 ($9,924) over the life of the loan. Bringing your score up to 700 could land you a rate of about 2.65%, saving you an extra $18,000. And if you could get your score to 760, an interest rate of about 2.43% could help you save $28,000 over what you'd currently be paying.\nFor an even more complete picture of your credit scores and how to improve them, consider Experian's 3-Bureau Credit Report and FICO® Scores product. In addition to the ability to view your Experian credit report and the FICO® Score based on it, you'll see scores and explanations based on your credit reports maintained by the other two credit bureaus.\nWhen you receive your scores from Experian, you'll also get some explanatory notes on what's affecting them (called risk factors) and how you can make improvements. Those suggestions can help you find focus when making moves to improve your scores in the months ahead. It's also wise to be mindful of the main factors that affect _all_ credit scores, and to adopt habits that tend to promote score improvement.\nWhen preparing to apply for a mortgage, the following steps are generally advisable to all borrowers. END