Do not take on new debt or make large purchases on credit cards.

The temptation is strong. There are many big purchases that people want to make in connection with a move: appliances, window treatments, furniture, etc.

Unfortunately, you will change what the mortgage industry calls your debt-to-income ratio's, the relationship of your income to your debt.

Additionally, the new inquiries and balance change on your credit report could negatively affect your score. This may cause you to be denied or not qualify for the best mortgage program.

What's on my credit report?

When deciding how much a lender will loan you, the lender will take into account your assets and debts, your debt to income ratios, and your credit rating. The lender wants to ensure they will receive their money back. The lender also wants to ensure they will receive their money back on time and will use your credit payment history to give them a good indication of the likelihood of you paying on time or not paying at all. Good credit history and ratings are critical to getting a loan at the best terms. The lender will decide on whether or not to give you a loan based on your credit history.

There are five major factors that affect your credit score:

• Your Payment History
• The Amount You Owe to a Creditor
• The Length of Your Credit History
• New/Recent Credit Obtained
• The Different Types of Credit You Have

It is critical to check your credit rating prior to approaching a lender for a loan. If there are any problems, you should try to resolve them prior to applying for a loan. If there are any unresolved issues, be prepared to respond to any questions the lender may have. A lender will want to ensure you are credit worthy.

How can I check my credit rating?

You can order a credit report for yourself. The lender will receive the same information as you do so there will be no surprises. Your creditors send in credit information about you weekly, monthly or quarterly to credit reporting agencies.

There are three major credit repositories where you can obtain your credit report.

1. Experian
P.O. Box 9556
Allen, Texas 75013
1-888-397-3742
www.experian.com

2. Trans Union
P.O. Box 2000
Chester, PA 19022-2000
1-800-916-8800
www.transunion.com

3. Equifax
P.O. Box 740256
Atlanta, GA 30374
1-800-685-1111
www.equifax.com

How can I correct mistakes on my credit report?

If your score has been unfairly calculated based on incorrect information or any issue that has already been resolved, you will need to bring this to the attention of the credit agencies. You will need to obtain a letter from the creditor stating the issue has been resolved. In case there was an error on the creditor's part, you will need to get the creditor to write a letter of explanation that you can provide to the credit agencies. If the error is with the credit agencies such as an incorrect name, you will have to clear it with them. Following this, your FICO score will need to be recalculated. You can request a credit report to check that the issue has been resolved.

Illinois Residential Mortgage Licensee MB5732 • Illinois Department of Financial and Professional Regulation • 122 South Michigan Avenue, Suite 1900 Chicago, IL 60603 • 312-793-3000