The bank wants to be sure you will pay them back the money you've borrowed, and they will look at your credit report. The better your credit, and the higher your FICO score, the easier it will be to get a loan and the lower your interest rate.
First, get current on all your bills. Then pay down your credit card debt so it's below 30% of the maximum offered on each card. Don't close credit card accounts if you've had them for a while, because length of credit matters to your score. Don't open any new credit accounts or make any major purchases.
There may be incorrect information on your credit reports, but it's not hard to dispute it. There's a simple form to fill out and sign, then just mail it to the three credit bureaus. It takes between 45 and 60 days to complete this process. Basically, the credit bureau receives your form. They may contact you to confirm your identity. They send your dispute to the creditors, who must report back in 30 days. If they don't respond, or if they agree with you, the derogatory item is removed. If they disagree, that item remains on your report, but you can dispute it again. Removing derogatory items may raise your FICO score and get you the chance to buy a house at the best interest rates. It's well worth your time.
credit dispute form
Send your credit report dispute forms to the three credit agencies.
Equifax Information Services, LLC, P.O. Box740241, Atlanta, GA 30374
Experian, P.O. Box 2002, Allen, TX 75013
Transunion, P.O. Box 4000, Chester, PA 19022
