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In terms of a Home Loan or Mortgage, credit check is an analysis of a credit report by a lender or another party before a loan offer is made to a borrower. A credit report contains information of an Individual's past credit accounts, creditors names, loan amounts, type of credit, whether timely payments were made and all the terms of the transactions were fulfilled by the Individual in the past. A credit check is basically an analysis of an individual's past pattern of fulfilling the terms and conditions of prior loans.
The credit report also contains the identifying information of the individual including their Social Security number, date of birth, current and prior addresses and other identifying information. The report also contains public information regarding the individual's prior Bankruptcies, Foreclosures, Delinquencies on any Federal and Student loans, Tax Liens etc.
The information database in the United States is maintained by three companies, known as Credit Reporting Agencies. They are namely Experian, Equifax and Transunion. When you apply for a loan, the lender would ask for your permission to view your credit report before an offer of credit is extended. The Lenders are looking for your credit score in addition to other information before an offer of credit is extended.
Related Topics: What is a credit score What Information is included on a credit report? Explain Information provided by the borrower regarding the right of refusal • Fair Credit Reporting Act (FCRA)/Fair and Accurate Credit Transactions Act (FACTA) 15 USC § 1681 et seq. What is credit risk? Give some Examples of credit risk What is the Length of time a bankruptcy will show on a credit history? What are General permissible acts under the Equal Credit Opportunity Act? What are the Credit score evaluation methods • FTC Red Flag rules, 16 CFR Part 681 ?
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