Check accuracy of your credit past before applying for home loan

"As we move closer to being a paper-less society, and as we use credit for everything from buying a house to buying cable television, credit reports will become more important," says Vaughn Irons, the manager of housing counseling for Consumer Credit Counseling of Greater Atlanta, a not for profit agency help that has numerous offices nationwide.

A credit report is simply a detailed history of whether you made credit payments - for mortgages, loans, credit cards, etc. - on time and for the right amount. It can include such things as late payments and re-possessions. Potential lenders or creditors, such as a mortgage company, use that information to determine how high a financial risk you are.

Irons says most consumers avoid looking into their credit reports. "I believe that some people are afraid to look at their credit reports because of what they'll find on it," he says. "For them, what's out of sight is out of mind. "Other people just don't realize how much credit reports affect them," he adds. "But they do affect consumers greatly. For example, even your junk mail is based on your credit report. If you've received an invitation for a pre-approved credit card, it's based on someone looking at your credit report."

As a result, credit counselors such as Irons recommend a yearly inspection of a credit report to avoid any hassles down the road. The report should also be checked several weeks before applying for a mortgage or other type of loan, again to minimize any problems or delays.

In the United States, there are three companies that keep tabs on people's credit histories: TRW, Equifax and Trans Union. These private, for- profit companies sell that information to any interested creditors."It's important to look at what all three companies have on you," says Irons. "While most of the basic information may be the same, information from small regional creditors - such as a department store in one section of the country or a jewelry store in another section - can be different." Each of the three companies must, by law, provide consumers with a copy of their credit report. TRW provides a complimentary report annually while the other two companies charge for theirs.

You can also receive a free copy of your report if a creditor has looked at it in the past 60 days, says Irons, or if you have been rejected for a loan, employment or insurance because of the report.

Once a report is received, many consumers may find the information somewhat arcane, despite guides from the credit report company explaining codes and forms. In that case, Irons suggested visiting agencies such as Consumer Credit Counseling, which has branches in every U.S. city with a population of more than 50,000 (to find a local office, call 1-800- 388-CCCS).

There are other groups which offer information, such as the National Consumers League. Send your name, address and $3 for postage to the League at 815 15th St. N.W., Washington, D.C. 20005. In addition, many social service agencies, churches and municipalities also provide credit counseling. "Some credit counseling services are even going online so they can pull a consumer's credit report for them," says Irons.

If you discover incorrect information on a report, act immediately, says Irons. "The companies usually include in their reports a dispute form that you can send back explaining the problem," he says. "They can take 30 days to investigate and clear up a mistake, but they usually do straighten out any errors." If corrections are made, the credit report company may also provide a second and free copy of the updated report.

There's little, however, that consumers can do to clear up any factual credit blemishes - except to come clean. "By inspecting your report, however, you can determine ahead of time what those blemishes are and be ready to explain them to a potential creditor," says Irons. "Many creditors are being more flexible with explanations." Hence, if a late credit card payment is listed on your report, a creditor probably will not blink if you explain that the check got lost in the mail.

To receive a report from TRW, send a written request with your printed full name, your current address and previous addresses for last five years with ZIP codes, your spouse's first name if married, your Social Security number, your year of birth, and proof of your current address: A photocopy of a billing statement, utility bill or drivers license. Make sure you sign the request and mail it to TRW Complimentary Credit Report Request, P.O. Box 2350, Chatsworth, Calif. 91313-2350; For more information, call 800- 682-7654. For more information on Equifax reports call 800-685-1111 or write to: Equifax, P.O. Box 105873, Atlanta, Ga. 30348. Information about Trans Union reports can be ordered over the phone by calling 800-851- 2674.

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