Syndication News Column:
The Real Estate Light
Credit Reports

A view of Rock Springs with 501 Talladega Dive in the foreground.
(This photo was provided courtesy of Ms. Kelly Palmer with Brokerage Southwest.)

Whether you’re looking to buy a house or rent an apartment in the United States, credits reports are likely the most important financial aspect of your life. Without a credit history, it’s difficult for someone to purchase or lease real estate.

Most people that purchase a home do so by making a down payment of cash and borrowing the rest of the money needed through a mortgage. Renters typically have to have sufficient funds for a security deposit and first month’s rent, at minimum, and sometimes also need funds for the last month’s rent.

People looking to sell their real estate want to know that you as the potential buyer have the ability to pay for the property. People looking to rent their real estate to you as the potential tenant want to know that you have the funds to pay the monthly rent.

Even more important is your propensity to actually pay for your obligations in the future.

Credit reports detail a number of items about your financial history, including how much money you have borrowed from others, how much money you could borrow from others, the length of time you’ve had credit with your lenders, your track record of paying back your loans, and businesses you’ve approached about securing new or expanded credit.

Loans included on your credit reports can include ones where you have borrowed funds from banks and credit unions as well as through credit cards and others providing credit. Also included are loans you have taken out to purchase a car or a truck, loans that helped you get an education at a college or university, home improvement loans, and a range of other types of loans.

In addition, credit reports also include information found in public records. These items can include liens filed against your property, non-payment of taxes, collection efforts for past debts, bankruptcies, and other things that may impact your credit worthiness.

Most credits reports do not include loans you may have or had with friends or family unless there is some type of independent documentation of those loans.

(Image was provided by Mr. Alexander Stein through Pixabay.)

The term “credit reports” is used because there likely isn’t just one credit report on you. Instead, there are likely at least three – if not more – credit reports detailing your financial history.

Having credit reports – accurate credit reports – is critical to most Americans today.

There may be situations where a resident has limited information on their credit reports or doesn’t even have credit reports detailing their financial history. These individuals may include young adults or senior citizens, among others.

In those cases, many businesses you approach for credit may turn you down – not because you have bad credit reports, but because you have no credit reports. If you have never borrowed money from independent sources – or haven’t done so for many years – you may not have much or any credit history to report.

In the next few news column, we’ll dig deeper into credit reports. We’ll discuss ways you can get copies and review your credit reports from three of the largest credit reporting businesses. We’ll detail how you can correct errors, have information removed, and have information added to your credit reports. We’ll explain ways that you can create a credit history if you don’t have one. We’ll explore ways you can enhance your current credit situation. We’ll also discuss steps you’ll need to take if you’ve lost or had a credit card stolen as well as if you’re a victim of identity theft.

All of these aspects are critical if you’re going to buy or rent a home.

© 2020 Richard McDonough