 TITLE: How Much House Can I Afford? CONTENT: Check Your Credit Reports and Scores\n------------------------------------\nWhen you apply for a mortgage, most lenders request your credit report and credit score from one or more of the three national credit bureaus (Experian, TransUnion and Equifax). If your credit score falls below a minimum threshold (determined at the discretion of the lender), your application may be turned down. Mortgage lenders' credit score requirements vary, but a minimum of 620 on the FICO scale of 300 to 850 is not unusual for a mortgage, and most lenders will reject applicants with FICO® Scores☉ below 580.\nIf your credit score barely meets the lender's minimum requirements, you can expect to pay comparatively high interest rates and fees on the loan. Lenders typically charge borrowers with lower credit scores more than those with higher scores. The difference between a \"fair\" FICO® Score and one in the \"good\" range can mean thousands of dollars in savings over the life of a mortgage.\nIn addition to checking your credit scores, most lenders will look closely at the credit reports they're based on. Negative entries in a report such as late or missed payments, accounts transferred to collection agencies, or more severe items such as foreclosures or bankruptcies can also be grounds for a mortgage application being rejected.\nTo know where you stand before seeking a mortgage, it's a good idea to check your credit report and credit score at least three to six months before you apply for a loan. You can get a copy of your credit report from each credit bureau once a year at AnnualCreditReport.com, or get your Experan credit report and score for free. Review your credit report carefully and consider taking steps to get your credit mortgage-ready:\n*   Inaccurate information on your credit report can hurt your credit score, so if you find any, follow up with the credit bureaus to make any necessary corrections.\n*   If your credit score is lower than you'd like, consider taking six months to a year to try to improve your credit score before applying for a mortgage.\n*   If you're ready to proceed with your home search, avoid applying for new loans or credit cards at least six months before applying for your mortgage (or mortgage preapproval). The credit checks associated with those applications temporarily lower your credit scores, which can work against you when you apply for a mortgage. Taking on additional debt also increases your debt-to-income ratio. END