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YOUR CREDIT REPORT IS KEY TO OWNING A HOME!
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The unfortunate reality in life for nearly all of us is that we are simply not able to pay all cash for a home. This means that unless we have a rich uncle, or win the lottery, most of us are going to have to get home financing from a bank, credit union, mortgage company, etc.

For Example: Let’s say the sale price of a home is $80,000. You are going to ask the finance company to please loan me $80,000 to buy this house, and I will pay you back. They cut a check payable to the home seller. And you start paying the money back in monthly installments just like you pay rent each month. Each portion of the monthly payments includes interest and real estate taxes.

As you can see the basic concept is pretty simple. And, as you can also see, it is that finance company that is risking all of the $80,000 up front. Which is why from the very moment you ask for the loan your credit report and score becomes a major issue. In fact, the very first thing that they will do is run your credit report. This is why it is very important for you to know exactly what is on your credit report. We created this page because Credit Reports are, by far, the number one reason that prevents people from owning a home! It is the thing that holds people back and keeps them stuck paying rent month, after month, for years.

Peninsula Homes knows that there are many people that already know a lot of the basics about credit reports and credit scores. We also know there are many who do not. Therefore we want to provide a brief overview of some important points to know:

WHAT IS A CREDIT REPORT?
Here is a very simple scenario
: Suppose a co-worker comes to you and says loan me $20 until payday. You feel it’s no big deal, you got the money, you know them from work, so you have no problem doing it. But then… before you actually give them the money… other co-workers who overheard comes to you and says I loan them $20 and they never paid me back. So… after hearing that, what would you think about loaning them the $20 now?

And that is exactly what a credit report is! It is a report made on you, by others, who previously gave you credit. John goes to ABC business and applies for credit… then ABC will check to see what other business have to say about John. And if they say John did not pay as agreed… or John had a lot of late payments… or John didn’t pay us back at all. Then ABC will definitely think twice about giving John credit. They may offer John much less than what he asked for. They may charge an excessively high interest rate and other fees because they consider John a risk. Or they just flat out deny John all together. This is how a credit report affects you!

THERE ARE 3 MAJOR CREDIT BUREAUS:
Experian (used to be TRW), Equifax, and Trans Union. Any other bureau that may be in your local area is in some way affiliated with one of these three bureaus. Any person, or company, that pulls your credit is getting it either directly, or indirectly from one of these three bureaus.

We all already know that if you plan on applying for a loan, financing a car, even applying for renting an apartment the very first thing everyone will do is pull your credit. But also… more and more employers are checking credit reports before making the decision whether, or not, to hire an individual. More insurance companies are checking credit when deciding how much to charge you.

Many of them, for different reasons, may only check your Experian… or they may only check Trans Union… or they may only check Equifax, etc. However when you apply for a major purchase like a home they will always check all three. There is a simple reason for this. Lets say for example somebody got a loan from XYZ company a few years ago and they never paid it back. XYZ company only reported the defaulted loan to Trans Union. Therefore if another loan company only checked the Experian and Equifax report, it would look like that person had good credit and they would never know about the defaulted XYZ loan. So the bottom line is that you can only get the complete picture by checking all three.

INQUIRES
This is something that many people seem to be overly concern with. Of course, you don’t want anyone unnecessarily pulling your credit report. But an example of a common scenario: Someone wants a car. They get up early and head to used car boulevard which every city has. They go from dealer to dealer to see what they can get. Letting each one pull a credit report. By the end of the day they have been to 15 different places and have 15 inquires. This is the kind of thing that will be looked at as excessive and can affect your credit score, as well as raising questions like did you get a brand new loan at all these places… is there any attempt of fraud, etc. etc. Most people know not to do this and don’t need to be concern about normal credit report inquires. They are expected and won’t hurt you. In fact many credit experts say shopping for a home mortgage rate deal is absolutely expected and that 3 mortgage company inquires within a 30 day period only counts as one.

What we do at Peninsula Homes, and what we recommend, is that you obtain a copy of the credit report yourself. It never counts as an inquiry when you pull your own credit report! You can black out the social security number if you like. Then email or fax it to as many companies as you like for them to review it to see who can get you the best deal. They should be able to tell you with certainty based on what they see on your current report. Only after you agree to work with them will they pull their own report. Then the information will be exactly the same and the only new inquiry will be their own.

WHO OWNS THE CREDIT REPORT
Another very important thing to know is that we are all use to saying things like “my credit report” or “somebody pulled my credit report” etc. But the fact is that we do not own our credit reports. The credit bureaus collects the information… then they create the report… and they own the report! Now, of course, that credit report has very sensitive and confidential information and there are all kinds of federal regulations and laws that must be followed, but Experian, Equifax, and Trans Union owns the credit report.

GETTING YOUR CREDIT REPORT
In fact, it was only a few years ago that it took a new federal law, and an act of Congress, to force Experian, Equifax, and Tran Union to at least give out a free copy of the report once per year. This is available to everyone, and there is only one place you can get it. The website is set up to be a central location where you can request one copy of your report from each of the three bureaus. It is every 12 month period from the date of the last time you ordered it. The website is AnnualCreditReport.com.

This free annual credit report is going to be perfect solution for a lot of people. However the big issue and question is going to be “What if you need to see your credit report more than once a year?”

There are simply going to be many situations, and reasons, why you will need to view your credit report more than once per year.

For instance, what if you already know that you have some negative items on your credit report. You know you need to repair your credit. Or what if there are a few items on your credit report that are mistakes and needs to be removed. You would most likely do each one at a time. And you would have to check your credit report each time to make certain they were updated correctly, or to make sure it was removed.

This is the necessary process of repairing your credit, and clearing up, your credit report.

Once you have accomplish this, then your credit report will not be an issue. Once you done this then your credit report will not prevent you from being approved for financing to buy a home!

But, you’ve already obtained the free annual report. So unless you know someone who has the ability to check your credit… without creating an inquiry… and is willing to periodically do it for you… for free, then you are going to have to pay each time to see your updated credit report.

CREDIT MONITORING SERVICES
So what is the least expensive way to check your credit report as much as you need to?

Well, we have all repeatedly seen the TV commercials for FreeCreditReport.com, FreeScore.com and many other services just like it. Their names create a lot of confusion, and misunderstandings, because their service is not free.

They are identity theft protection and credit monitoring services. When you sign up to become members of the service one of the benefits is the ability to view your credit report 24 hours a day 7 days a week.

These companies say their identity theft protection & monitoring is the service your membership is for. And viewing your credit report is an additional benefit. That’s how they get away with using names like freecreditreport, etc.

The U.S. Department of Justice and the FTC estimates as many a 9 million people are victims of identity theft. If it has ever happened to you, or someone you know, then you know it can create an absolute nightmare of problems in your life. The FTC says identity theft & credit monitoring is a vital service and recommends it.

But that is another subject for now. Our focus here is repairing our credit report and having the ability to see it as much as we need to.

The big factor for you is that the monthly membership for these services are inexpensive and there is absolutely no term commitment. You can cancel with no obligation, or penalty, at anytime. So you can join the service for however long you may need to get everything updated on your credit report. And then cancel once it is all done.

The best identity protection and credit monitoring service that we found is not FreeCreditReport, or FreeScore. They have way too many complaints due to the confusion over their name. We recommend a service provided by Identity Guard.

You can choose services between $9.99 to $24.99 per month. You can get an identity theft & credit monitoring service. No term commitment… Cancel anytime… and you can view your credit report as much as you want.

This service will alert you immediately if there is an inquiry, or any change to your credit report. But the important thing is that you will have unlimited access to your credit report 24hrs a day as long as you have this service.

USING CREDIT MONITORING WHILE YOU ARE DOING CREDIT REPAIR

So if you know you have a few things to fix on your credit… then this is the service we recommend once you are ready to start:

1) You first start by getting your free yearly report AnnualCreditReport.com

2) Have a mortgage finance company review it for free. They will let you know exactly what you need to do. Peninsula Homes can assist you with this if you like. We can actually forward the report to more than one mortgage company to see what they can do for you.

3) Then only after you have taken care of a couple things and know they should have already been updated… then you can sign up for the Identity Gaurd Service to view the updated credit report. And then start to work on other items on your credit report as necessary

4) Once you see everything has been corrected, updated, removed, etc; and your credit report is now clean you can cancel the service and let the mortgage company know you have done everything.

Everyone’s credit circumstances is different. Many people successfully maintain very good credit. Therefore this information is not intended for them!

And many people will only have one, or two, things to fix and will not need this at all! They can just do exactly what the mortgage company tells them to. And then let the mortgage company know when it is done.

But many others will have a lot more issues on their credit reports that need to be cleared up, and it may take some time. They will need to check updates to their credit report as they progress. If you use this service very wisely then most people will only need the membership for approximately 2 to 4 months. Of course you can keep the service if you feel identity theft protection & credit monitoring is something that is important to you.

The bottom line is that if you know you have bad credit… and you are ready to start cleaning it up, so you can take a step up in life, and own your own home… then this is one of the least expensive ways to do it.
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