As part of the mortgage loan application process, your lender will review a copy of your credit report. The report will list all long-term debts (credit cards, mortgage payments, automobile and student loans, etc), as well as your payment history. If you don't have a copy of your credit report, lenders will likely require you to pay for a copy when they process your loan application.

It's a very good idea to obtain a copy of your credit report several months before you apply for a loan. This is so you have a chance to resolve any problems with your credit before your bank sees it. An amendment to the federal Fair Credit Reporting Act requires each of the nationwide consumer reporting companies (Equifax, Experian, and TransUnion) to provide you with a free copy of your credit report, at your request, once every 12 months. The only online source authorized to provide a free reports is annualcreditreport.com. Beware of other sites that may look and sound similar. Other sites may claim to offer "free" credit reports, but charge you for another product if you accept a "free" report.

Errors on your credit report
It is not uncommon to find credit reports with errors or inaccurate information. If you find issues with your credit report, you'll need to contact the reporting agency or creditor to have the problem resolved. This can sometimes be a slow process, so make sure to give yourself time to clear up the mistake.

Late payments
Problems with credit report are likely to be related to late payments on a debt. If you were late one month in paying off your credit card, but otherwise have a good payment history, chances are most lenders won't be too concerned. But if you have a history of late payments you'll need to document the reasons why. A slow payment history won't necessarily get you turned down for a loan, but you may have to pay a higher rate of interest or otherwise prove to the lender that you can repay your loan in a timely fashion.

Bankruptcies
It's not a news flash that a bankruptcy on your credit report is not a good thing. However, that doesn't mean you still can't obtain a loan. Even though a bankruptcy may stay on your credit report for seven to ten years, lenders may consider the circumstances surrounding a bankruptcy (family illness, injury, etc.). Furthermore, if you have reestablished good credit since the bankruptcy, a lender will be more inclined to approve your application.

Preventing identity theft Again, you may receive your credit report once every 12 months from Equifax, Experian, and TransUnion. This may be done at the same time or you might choose to request your report from each reporting agency at 4 month intervals. Doing so, allows you to identify unuasual credit activity in a more timely manner.