Many home buyers are very worried about how their credit report will
affect their ability to buy a home. We even heard one story that an
applicant was denied a mortgage because he had returned a rented
videotape late!
Of course, that could never happen. Most people will not need to
worry about the effects of their credit history during the mortgage
process. However, you can be better prepared if you get a copy of your
credit report to review before you apply for your mortgage. That way, if
there are any errors you can take steps to correct them before you make
your application.
If you have had credit problems, be prepared to discuss them honestly
with a mortgage professional and come to your application meeting with a
written explanation. Responsible mortgage professionals know there can
be legitimate reasons for credit problems, such as unemployment, illness
or other financial difficulties. If you had a problem that's been
corrected, and your payments have been on time for a year or more, your
credit may be considered satisfactory.