Unit 1: Do you want to buy a home?

Lesson 3: Your credit report

When you ask for a mortgage loan, you must list all your debts and the monthly payments you owe. For example, you may owe money on a car loan. Perhaps you owe money to credit card companies. The mortgage lender will get a credit report from a credit reporting agency to check the information you have given it.

A credit report lists all your credit cards and loans. It shows how much money you owe and how long you have owed this amount. It also shows the type of loan and your payment plan. All this information will help the mortgage lender decide if you will be able to repay a mortgage loan.

Nontraditional Credit History—If you do not have credit cards or have never taken a loan from a bank or business, you can still put together a credit history. You can show that you pay your rent, telephone, car insurance, and utility bills on time each month. For example, you can collect records of cancelled checks or make copies of monthly bills that do not have late charges. This is called a nontraditional credit history.

Tran’s credit report (For a larger version, click here.)

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