Since it's Halloween this week, I thought I would see if your credit report is also haunting you!! Are there skeltons hiding in your credit report? Many people are surprised when they go to buy a home and get qualified for a mortgage.
Your online credit score is probably not the same as your mortgage credit score. There are different scoring modules for different creditors. Mortgage credit scores are based on specific items and will probably give you a lower score than any online credit scores.
Credit inquiries remain on your report for 120 days and you will need to explain what the inquiries were for. If there is any new debt you will need to document the new debt.
Co-signed debt, especially student loans will be counted as your debt. If you have co-signed for your kids to go to college, those debts will be used against you, even if they are deferred payments. If the payments have been made by your child for the past 12 months and it can be documented, those payments do not have to be used against you.
Chargeoffs – you may think that the debt is gone but typically it is treated as a collection and you may have to pay that debt off before you can close.
Disputed accounts – these have become more important. Disputed accounts aren't always used in the credit score calculation. If the disputed account is truly yours, it needs to have the reported dispute removed before you can close on your mortgage.
Make sure you look at your credit report and see if there are any surprises. You may want to start the preapproval process sooner than later, especially if you are concerned about your credit report.
Leslie Vanderwerf, NMLS ID#335509, American Mortgage and Equity Consultants – Email – Website
