Your credit report is an ongoing look at how you manage your finances. Credit reports play an important role in the mortgage approval process and in the process of determining the interest rate and which loan programs may be better suited for you. Lenders will also take a look at how you have handled credit in the past as compared to recent with considerable emphasis on the most recent 12 to 24 months. You must be able to demonstrate that you have the ability and willingness to repay obligations responsibly.

Lenders generally require a credit report to examine the condition of your credit which provides an historical assessment of your credit history. Credit reports give an overall picture of how you have paid your previous debts as well as some general information such as age, bank account information, outstanding loans, debts and court judgments. If a consumer has a solid credit record they have a better chance of being approved for a mortgage loan but that is not the only factor taken into consideration during the loan application process. Several other factors contribute to eligibility formulas including price of the home, fixed expenses, income and monthly payments and expenses.