5b. Common credit challenges
5c. The importance of checking your credit
5d. Using letters of explanation
5e. How to build a good credit history
Read the full Chapter Five in one page
Credit reports are designed to measure a person’s credit worthiness and they are used to predict how likely a buyer is to repay debt in the future. Before deciding to purchase HUD homes, it is important that potential buyers take time to check their credit report.
Why should buyers check their credit report? In many cases, errors may occur on a credit report and any errors may not be corrected promptly. Even if a buyer has taken measures to improve their credit score and credit report, it may not be showing up on their credit report. For this reason, buyers need to take a closer look at their credit report so they can ensure their credit report is free of errors.
What can be done about errors on a credit report? Consumers have the ability to dispute any errors on their credit report, asking credit reporting agencies to eliminate entries that are in error. However, consumers must be able to prove that an error has been made.
Buyers need to remember that they have three different credit reports – one from each of the credit reporting agencies. These three agencies include Experian, Equifax and Trans Union. You can obtain your credit score and all three credit reports through YourScoreAndMore.com or similar services (YourScoreAndMore.com offers a $1.00 initial trial, making it an affordable option). The following is the contact information for each credit reporting agency:
- Experian – (888) 397-3742
- Equifax – (800) 997-2493
- Trans Union – (800) 888-4213