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If you have ever been approved for a credit card, paid a monthly bill, or taken out a loan, you have a credit rating. This credit rating is compiled for you by a credit reporting agency that gets their information from creditors you owe money to or otherwise deal with. Often times, when you are unable to get credit, it is due to one of these credit reports. A negative credit report comes from missing payments on credit cards or loans, or, even worse, having one of your creditors send one of your outstanding debts to a collection agency.

It is rare to come across a person without some sort of debt. Student loans, mortgages, car payments, and credit card balances have become a way of life for those of us living beyond our means. The long record of debts and their payment history become your credit history, something most people don’t worry about until they are buried deep in debt. Suddenly, your credit history begins to influence your life in ways you never imagined. With a low credit score, renting a car, obtaining a loan, or getting a new credit card all become much more difficult. For this reason, it is of utmost importance to repair your credit if you find yourself in this situation.

When you apply for a mortgage, your loan officer, broker or underwriter is going to take you through the application process and then ask you to provide proof or documentation supporting your answers. To learn more about how that application process works and exactly what it takes to qualify for a mortgage, keep reading.

Income

The first concern a loan application will ask about is your income. They’ll want to know your gross income. To verify your income, you’ll need to provide either your current pay stubs or a letter from your employer and a copy of your bank statements verifying it. In addition, you will need your tax returns from the past year.

Most people know that their credit history can help influence the decision if they get approved for a loan or not. Yet, some people do not realize that their credit score might decide what they will pay for their insurance. Some insurance companies will wait until after raising the rate to let their customers know that the price has increased.

This was the case for Michelle Cardin of Aliso Viejo, California. Her insurance company let her know that her premium was going to be increased by $511, based upon her most recent credit score. Ms. Cardin was quick to access her credit report from the internet and found out that her credit score had dropped from 678 to 570 in recent months.