Most people know that their credit score is a huge factor in determining interest rates for mortgages, but many do not know that their debt history stretching back seven to ten years could cost them thousands of dollars over the life of their loan.

That's right, your credit history follows you for a decade

This will include anyone you shared credit with during that time (including a spouse or child.)  Your slightly blemished credit rating can easily result in a higher interest rate than you could have received. Improving your credit score will get you a better rate and save you money.

What you must know about credit reporting

Your credit cards and all types of loans (home, auto, boat, etc) with payment histories are compiled and evaluated on your report. 

Judgements, liens (including for alimony and child support), foreclosures, and bankruptcies are included and obviously drive your number down precipitously.

Errors do occur in many reports and can be disputed. You may also add remarks to your file in order to do damage control. If you feel that you have been the victim of fraud, contact the National Fraud Information Center

Know your credit scores

The three major credit reporting agencies are the commercial entities Equifax, Experian, and TransUnion. They compile individual reports so they may vary slighlty from comapny to company, but you can request a yearly consolidated report for FREE

Look carefully at your report when you receive it and make sure any errors are disputed. They must remove any inaccuracies, but this can be a protracted process for you. Maintain good records of any correspondence with the credit reporting agencies.

Credit Score Repair

If you have a less than stellar record the best things you can do are address any outstanding debts, paying on time and at least the minimum payment. Try to establish a couple small lines of credit that you can pay off and do not max out any of your cards or loans. Time can help you improve your score, but you must show discipline and reliability over the long term to earn the best scores and thus the best loan terms.