How does a lender use my credit report?

Lenders may use your credit report information to decide whether you can get a loan and the terms you get for a loan (for example, the interest rate they will charge you). Insurance companies may use the information to decide whether you can get insurance and to set the rates you will pay.

Should I check my credit report before applying for a mortgage?

Errors on your credit report can reduce your score artificially – which could mean a higher interest rate and less money in your pocket – so it is important to check your credit report and correct any errors well before you apply for a loan. Your credit score is only one component of your mortgage lender’s decision, but it’s an important one.

How does a credit report work?

Credit reporting agencies collect your credit history from credit card companies, banks, mortgage companies and other creditors to create an in-depth credit report. The information in that report is also used to calculate a three-digit credit score.