A Credit Report is a detailed record of an individual’s credit history. Compiled by credit bureaus, it includes information about credit accounts, borrowing behavior, repayment track record, and any outstanding debts. Lenders use credit reports to assess an individual’s creditworthiness when considering loan applications, including mortgages.
The three largest credit bureaus are Trans Union Corp., Equifax, and Experian (formerly TRW).
Related Real Estate Terminology
- Credit Score: A numerical representation of an individual’s creditworthiness, derived from the information in the credit report.
- Mortgage: A loan used to finance the purchase of a property, for which the property itself serves as collateral.
- Lender: An institution, typically a bank or other financial institution, that lends money to individuals or businesses for the purpose of buying property.
- Loan-to-Value Ratio (LTV): The percentage of the property’s value that is financed by the loan.
- Default: The failure to repay a loan according to its terms.
- Foreclosure: A legal process in which a lender attempts to recover the amount owed on a defaulted loan by selling the mortgaged property.
- Debt-to-Income Ratio (DTI): A measure of an individual’s ability to manage and repay their debts, calculated as total monthly debt payments divided by gross monthly income.
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