Calabasas, CA (Vocus) March 3, 2008
Whether buying a home or refinancing an existing mortgage, it is important that home buyers and homeowners understand the connection between credit history and home loans. Lenders look in detail at credit history and score as important factors before making a lending decision. People with good credit histories and scores generally qualify for mortgage loans at lower interest rates because their credit demonstrates that they are a lower risk to lenders. On the other hand, people with credit problems and lower credit scores are generally regarded as representing a higher risk to lenders, and if offered credit, usually are charged higher interest rates and qualify for lower loan amounts.
An annual credit checkup can give consumers insights into their specific credit profile. In How Credit Affects You, one of the components in Countrywide’s comprehensive no-cost, no-obligation Home Ownership Mortgage Education program (H.O.M.E.), consumers are urged to check their credit reports for accuracy at least once a year and pay especially careful attention to its four main categories: biographical information, account information, inquiries and public information.
1. Biographical Information
Check for the accuracy of your name (and former names if married), address (and previous address), Social Security number, date of birth and place of employment (including previous employers).
2. Account Information
Account information summarizes your credit accounts. Lenders generally report on each account you have established with them, the type of account (bankcard, auto loan, mortgage, etc), the date you opened the account, your credit limit or loan amount, the account balance and your payment history. Check the names of lenders/creditors, dates when accounts were opened, current balances and credit limits. Pay particular attention to late payments listed and the current status of your accounts.
The inquiries section contains a list of requests for your credit report within the last two years. The report you see lists both "voluntary" inquiries (triggered by your own requests for credit) and "involuntary" inquires (such as when lenders order your report to make you a credit card offer by mail). Knowing how many inquiries are in your credit file is important. Too many inquiries during a given period might indicate you are trying to get a lot of credit quickly — a red flag to lenders.
4. Public Information
Public record information includes bankruptcies, foreclosures, lawsuits, wage attachments, liens and judgments. Also included here is information from collection agencies about overdue debt.
Each of the three major credit-reporting agencies will provide you with a free copy of your credit report, at your request, once every 12 months. The credit report does not include your credit score. However, you can order your score for a nominal fee. You can request your credit report by phone 1-877-322-8228 or online at http://www.annualcreditreport.com.
In the How Credit Affects You component of Countrywide’s no-cost, no-obligation Home Ownership Mortgage Education program (H.O.M.E.), consumers will also find tips and tools for improving credit and correcting errors on a credit report. These helpful insights are just a few of the many valuable ways to boost knowledge offered through the Web site.
The H.O.M.E. Web site (http://www.HomeByCountrywide.com) offers an interactive learning center which includes comprehensive information about the following five topics: Basic Finance, How Credit Affects You, Preparing for Home Ownership, Steps for Buying a Home, and Life as a Homeowner. Also featured are extensive tools and resources, including downloadable checklists, worksheets and quizzes that assist home buyers and new homeowners.
Portions of the H.O.M.E. program have been produced in cooperation with the National Foundation for Credit Counseling (NFCC) and are based in part on the NFCC publication “Keys to Home Ownership,” © National Foundation for Credit Counseling.
Founded in 1969, Countrywide Financial Corporation is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. For more information about the Company, visit Countrywide's website at http://www.countrywide.com.
About The National Foundation for Credit Counseling (NFCC)
Knowing the Difference Can Make All the Difference
Founded in 1951, the NFCC is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to set the national standard for quality credit counseling, debt reduction services, and education for financial wellness, through its member agencies. With nearly 1,000 community-based offices nationwide, NFCC members help two million consumers annually. For free and affordable confidential housing advice through an NFCC member, call 1-866-845-2227 or visit http://www.nfcc.org
For media inquiries:
Amber V. Cousins or Christa Keivan
pressroom @ countrywide.com