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Understanding your credit score and report


Lenders look at your credit score and credit report as important factors in deciding whether you can obtain a mortgage loan. A good credit score and a positive credit history will improve your odds at approval – but what does that take?

Know which factors determine your credit score

First, it’s helpful to know some of the factors that the major credit bureaus – such as Equifax, Experian and TransUnion – look at when calculating a credit score. A credit scoring system awards points for various factors in your loan repayment and credit history. The total of these points is your credit score, which lenders consider when determining the risk and interest rate on a loan.

Credit bureaus consider these factors when calculating your credit score:

  • Do you pay your bills on time? If you have paid late, had an account sent to a collection agency or have declared bankruptcy, this will have a negative impact on your credit score.
  • What is your outstanding debt? Many scoring models will compare the amount of debt you have compared to your credit limits. If the amount you owe is close to your limit, it is likely to have a negative impact. So if you have a lot of credit cards, and the balance on all are close to maxed out, this can have a negative effect on your score.
  • How long is your credit history? A short credit history can have a negative impact on your credit score. However, you may offset this by making payments on time (e.g. rent, utilities, credit cards) and maintaining low credit balances.
  • Have you applied for credit recently? Applying for too many accounts within a short time period can have a negative effect on your credit score.
  • What kinds of credit are you using? Many credit scoring models will consider the number and type of credit accounts you are using. Too many finance company accounts or too many credit cards may hurt your score.

Request a free copy of your credit report

Your credit history is all contained in credit reports at the major credit bureaus, so it’s important to review these reports to ensure accuracy. You are entitled to a free copy of your credit report from each bureau every 12 months. You can start that process at

You can request these from all three bureaus at once, or many people advise staggering your credit report requests across the year so you can better monitor for ongoing accuracy.

When requesting your free credit report, you will be asked to provide the following information: name, address, Social Security number and date of birth. If you have moved within the past two years, you will likely be asked to provide a previous address. For security purposes, the company may also ask you for a secret question that no one else would know.

Review your credit report for accuracy

Requesting a copy of your credit report is just the first step. You will also want to review it for accuracy, and report or dispute any inaccuracies. Credit bureaus and the organization providing the information to them are both responsible for correcting errors found in your credit report.

If you find any errors, dispute the errors by first sending a dispute letter to the credit reporting company. Some information that may be required – or helpful to your case – include:

  • Your name and address.
  • A list of each error found on your report, along with an explanation of why you dispute the item. Also request that error be removed or corrected.
  • Copies of documents that support your position.

Keep a copy of your letter and supporting materials for your files. Credit reporting companies are required to investigate your dispute and to provide you a written copy of the results. If your dispute results in a change to your credit report, the company must give you a free copy to review. Be sure to ask the company to send notices of correction to anyone who requested your credit report in the last six months.

You should also send a letter to the creditor who provided the inaccurate information to the credit bureau. Include information similar to your dispute letter to the credit reporting company while being very clear that your disputing something. I often recommend using the language, “I am writing to provide you notice of dispute…” in the letter.

Keep a file with your credit report and all dispute history and documentation. For additional information about your rights in the credit dispute process, visit the Federal Trade Commission website.

About Lucita Paguio

Lucita brings over 30 years of financial acumen and service dedication to her role as consumer banker team lead with Bremer Bank. She oversees a team of consumer bankers and manages the Brooklyn Center branch of Bremer Bank. With her goal-centric approach, Lucita enjoys helping her customers identify their needs, set plans, and actively work toward meeting goals such as homeownership, car-buying, retirement planning, and more. Prior to joining Bremer in 1998, Lucita’s career included roles at California Federal Bank and International Savings & Loan. She holds a Clerical Certificate with a focus on banking from University of Hawaii Community College. An active member of her community, Lucita volunteers at her local church and with the Brooklyn Historical Society where she is past treasurer. In her free time, she enjoys spending time with her family, cooking, walking and gardening. )

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