Your credit report is an important part of the mortgage application process; lenders want to see your long-term debts including credit cards, car payments, student loans, etc… They will also be looking at your payment history. Some lenders will accept a recent copy of your credit report if you have one; otherwise, you will have to pay a fee for them to run your credit.

In any event, real estate professionals recommend that you get a copy of your credit report several months before you apply for a loan. This way, you can review it to be sure it doesn’t contain any "surprises" or inaccurate data.

Besides your overall credit score, there are several things a lender is looking for when they view your credit report.

Late Payments: The most common problem that reduces credit scores is late payments on a debt. Chances are they won’t be too concerned with one late payment if you have a good history; however, if you are repeatedly making late payments you will need a good explanation. A low credit score or slow payment history might not cause you get turned down for a loan, but you may have to pay a higher interest rate.

Errors: Many people are surprised to find that their credit report contains errors or inaccurate information. If there is inaccurate data on your credit report it is important that you contact the reporting agency or the creditor to get the problem resolved. This can be a slow process so be sure you have plenty of time to clear up errors on your credit report.

Bankruptcies and Foreclosures: Bankruptcies and foreclosures can remain on your credit report for up to 10 years, but they won’t necessarily prevent you from getting approved for a loan. Lenders will often consider the circumstances that led to the financial problems, especially if you have established good credit since the bankruptcy or foreclosure.

A good credit history with no negative information is ideal when you are applying for a mortgage. You want to present yourself as a strong buyer and convince the lender that you will be able to meet your obligation to make timely payments on your loan.