Menu

Checking Your Credit

If you need to borrow money for a home remodeling project, then you will need to know a few things about your credit history in order to see what kind of interest rates and loan amounts you may be eligible for. While your credit history isn't the only factor in deciding what loan amount you will receive, it is a major factor in who will give you a loan and what types of loans will be available for you. Before getting a credit check, you should find out what your debt ratio is. If you are uncertain if you owe anything, then you'll need to get your credit report first.

Getting Your Credit Report

You can go online and get a free credit report from one of the three credit bureaus. You can start at the main site for free credit reports AnnualCreditReport.com. This site will direct you to one of the credit bureaus, either Equifax, TransUnion or Experian. By law, you can get your credit report once every three months from any of these credit bureaus for free. You have to input some identifying information to get a copy of your report. Once you have gotten your report, you should look for the negative factors on your report, including what you owe and what is in collections. If you have a lot of debt, you won't be a good candidate for a loan.

What To Look For in Your Credit Report

The items that are listed on your report determine whether or not you will be eligible to obtain any financing, whether it be for the home remodel, car or a personal loan. You want to look at everything that is listed on your report to make sure that there is nothing erroneous. Sometimes a creditor may report a debt as delinquent even though you paid. If you do find an error, then you will need to write a dispute letter to the credit bureau with information and documents that proves you have been making payments. These documents may include voided check stubs or even bank statements that prove the payments were made.

Your Credit Score

To get your credit score or FICO score, you'll have to put in a little bit more effort and probably pay the credit bureau a fee to provide your credit score. Your credit score is a number that represents the creditworthiness of a person, the likelihood that you will pay back the loan, in other words. For those with very low credit scores, under 700, it's likely that you will not be eligible for a loan. Otherwise, you may be offered a loan with a very high interest rate. Credit Scores are used by various organizations to find out if you are a good borrow along with your credit history. It's assumed that your credit history can also play a part.

If You Have No Credit

In many cases, especially if a college student or simply frugal, you may have never built credit. That doesn't necessarily mean that your credit is bad. It just means that you haven't been acknowledged yet as a good payer or a bad payer. This means that you can build some credit before trying to get financing or if you have been a long-term member of a bank, you can try to apply for a loan based on your history with the bank. Otherwise, it may be difficult to get a loan, though you may be able to get a line of credit with a major credit card company, but only for a small amount at first.