One of the most important steps you can take in preparing for that first home purchase is to do some homework first. And the first step should be a visit to all three credit bureaus and obtain copies from all three.
You should start this process at least four months prior to you making your first offer on a new home. This will give you ample opportunity to order the reports, have them delivered and then carefully examine all three reports for accuracy. You may find errors that need to be disputed and corrected. The process of submitting a request for investigation and review can take several weeks to a couple of months to rectify. You do not want to wait until you are ready to start your loan and home buying paperwork to discover an error that could stop you from buying the home of your dreams.
You may find an error or two on one report, nothing at all wrong on the second and something in between on the third report. This is why you have to make an early effort to order and investigate this up front.
Even in the event that you do not find any errors on your report, you may find that there is something negative on the report that you might have forgotten about. A late payment on a credit account or bill that went unpaid from over a year ago will still appear on the report. It is important that you discover, resolve and attempt to have removed anything that is a negative on your report. A negative on your credit report or a low credit score (the number assigned based on a number of factors that include open credit line amounts, current credit amounts owed, late and on-time payments made, credit inquiries made by lenders, etc) may not prevent a lender from approving a home mortgage for you but it can lead to the lender charging more for the loan in the form of closing costs (the amount of money paid for the service of opening a home loan) or in the actual lending charge (interest rate) that they charge you over the course of the loan. This may only amount to a couple of points of interest increase but on a purchase of this size and loan length, this can amount to thousands of dollars over the course of the loan.