UNDERSTANDING CREDIT There are countless items to consider with regards to financing. Perhaps the most important is a borrower's credit history. A lender may examine the borrower's credit to get an idea of the risk associated with the loan, and the likelihood of that person defaulting on the payments. A borrower with excellent credit history may have more options when it comes to choosing a loan. They may get a lower interest rate and be able to place as little as 0% down. If you were denied financing in the past, not to worry. There are several options now available for borrowers with poor credit history. The catch is that you may have to pay a significantly higher interest rate. If you are unsure of your credit score or history, I always suggest getting a copy of your credit report before you ever talk to a lender. Colorado residents are entitled to one free credit report a year. This can be found at equifax.com, which is one of the three major repositories of credit and background information. The reason I recommend using Equifax's scoring is because it tends to be the score lenders will use in determining their risk. The other two repositories, Experian and TransUnion have their own scoring models, but 70% of the nation's creditors use Equifax's "FICO" score in making financial decisions about consumers. Once you order your report and score, you can view it to ensure all of the information is correct, and that nothing is listed that you don't recognize. Identity theft is a very serious problem, and people often complain of discovering things on their report (open accounts, etc) that are simply not theirs. This can create a number of issues, especially when those mysterious accounts are in default, and you come to realize this when you wish to apply for a loan. If you find something that seems suspicious, you may report it to Equifax (or the other two repositories) and request that it be removed. It is important that you regularly view your report, since these repositories only accept the information; they don't check it for accuracy. Be absolutely sure to view your score, since this will ultimately give you a good idea of where you stand when shopping for a loan. You can then use this to your advantage in a number of ways. I suggest speaking to at the very least three lenders or mortgage brokers. Now, here's what you do. You can tell them that you have a current copy of your report and what your score is. DO NOT give anyone your social security number until you absolutely know that you will do business with them. Many times, people will shop around for a loan over a two or three week period, and each lender will pull their credit to see what they qualify for. If you give your social security number to a lender, they will immediately pull your credit. If you do this numerous times, it will show up on your report as "multiple inquiries" and can negatively impact your score. If you know what your score is, you can avoid this issue. A lender should have no problem providing you with rates or loan options given you provide them with current information.