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I Want to Buy a House — Should I Check My Credit Report or My Credit Score?

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I want to buy a house — should I check my credit report or my credit score?

So you want to buy a house and want to know if you should check your credit report or your credit score. Buying a house is the biggest purchase you will ever make, so you should check both your credit report and your credit score.

But a word of caution: Your credit report doesn’t contain your credit score. You would think a credit report would be kind enough to tell you just how great your credit score is, but the two items are totally different.

Your credit report

Your credit report contains your complete history of credit use. It has all your credit card accounts, even those that are closed. It lists all your bank accounts, past and current addresses, any outstanding installment loans, car loans, student loans and any accounts that are in collection.

It also includes liens that third parties have on your assets.

What to look for

What you are looking for in a credit report is that everything is as you expect it to be. If you know you always pay your debts on time, there shouldn’t be neither accounts in collection, nor liens.

Sometimes, things like medical bills may have slipped through your payment cracks. That’s the most common thing you may find listed as an account in collection.

If you find something that you know is wrong, you must open a dispute. Get everything in order before even thinking about getting a mortgage.

Where to get it

You can get a free credit report from each credit bureau every year at www.annualcreditreport.com.

Your credit score

Your credit score is something that’s pretty much a monopoly product, issued by Fair Isaac Co. It’s the only score that matters, and that’s why you have to be careful.

The three credit bureaus publish their own proprietary scoring system, but creditors don’t really pay much attention to those. Neither should you. We don’t know the scoring model for each, whereas your FICO score is standardized (even though nobody knows how the score is actually calculated).

Where to find it

You can find your FICO score through Fair Isaac, but there are many third-party services that will link you up to the score as well, often at a special price. If you happen to have the Discover it® credit card, your FICO score appears on your monthly statement.

Free credit scores aren’t to be trusted, however. Other services may offer you a free FICO score, but then you’ll be signed up for a monthly recurring charge in some kind of membership program involving credit, or credit monitoring, or debt settlement, or any number of other things. These might be worth it, depending on various circumstances.

If you are applying for a mortgage, you ideally want to have a FICO score above 760, which is generally considered “excellent.” A score of 700-759 is still considered “good.”

Homebuyer image via Shutterstock.