credit reports

More Columbia SC homebuyers should be able to qualify for a mortgage without the increasing risk to lenders that caused the big credit crunch. All of this should come about through more sophisticated credit risk scoring that uses alternative data, such as unsecured credit and property history in consumer credit report analysis.

Traditional credit data and analytics continue to be relevant, but are not sufficient to satisfy the consumer credit reformation of today. As a result of the changes in consumer behavior, lenders cannot revert back to their prior mortgage underwriting policies. Too much damage has already been done to the market, consumers, shareholders and investors.

Consumers used to pay mortgage debts first, but because of the recent financial crisis some consumers now treat paying other debts, such as credit card bills and car payments, as a higher priority to maintain personal financial liquidity.

Why More Columbia SC Homebuyers May Qualify

Fico ScoresAccording to a new report by the CEB TowerGroup, data from a joint analysis conducted by CoreLogic and FICO that compares the FICO® Score used by most lenders today with a new score launched in July was evaluated. The traditional credit data from national credit data repositories and the unique alternative credit data contained in the recently launched CoreScoreTM credit report shows the analysis of 300,000 mortgage applications found that 3,100 more applicants would receive a qualifying credit score of 700 and approximately 70 percent of a sample population saw their credit score improve.

The new FICO/Corelogic score is more accurate than the prior FICO® Score in identifying the riskiest loans improving lenders ability to discern consumer credit risk at origination. For applicants identified as the riskiest 10 percent of the lending population (those most likely to become past due on their mortgage loan), it identified 10 percent more seriously delinquent mortgage loans – loans 90 days or more past due.

This new credit risk scoring should help more Columbia SC homebuyers qualify for a mortgage than with the old scoring system. Alternative credit information can support Columbia SC homebuyers with newly established credit files with good credit, those with minimal information in their traditional credit files but with good alternative credit payment histories, and long-time renters with no serious payment issues.

Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Columbia SC homebuyers need to know the rules of credit reporting in this marketplace where lenders are demanding record-high FICO scores.

Given the importance of maintaining high scores, we thought it would be helpful to go over the key rule concerning inquiries that affect Columbia SC homebuyers, since Fannie Mae and Freddie Mac are now averaging around 760 scores on approved mortgages this year.

FICO Inquiry Rules Affecting Columbia SC Homebuyers

homebuyers need to know the FICO rulesRacking up large numbers of inquiries can lower your score. The FICO models consider such numbers significant because extensive behavioral research has shown that “consumers who are seeking new credit accounts are riskier,” more prone to defaults. Statistically, people with six or more inquiries on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports, so inquiries do matter.

This doesn’t mean if you’re shopping for a mortgage or looking to refinance that your score will drop if you have 6 lenders pull your credit reports. The FICO models ignore all mortgage-related inquiries during the 30 days immediately preceding the computation of the score. All mortgage inquiries during the 45 days preceding your loan application count as no more than a single inquiry. The same goes for shopping for auto loans and student loans, but no other forms of credit fall under this buffer zone.

Fannie Mae and Freddie Mac have begun requiring lenders to pull a second set of credit reports immediately before closing to ensure that applicants’ FICO scores haven’t changed significantly. Depending on when the first reports were pulled, you could be hit with two inquiries for the same loan. That could cost you 5 to 10 points on your score.

Columbia SC homebuyers need to keep in mind, if you’re shopping for a mortgage, avoid all other credit-related shopping until your mortgage is approved and closed. Avoid shopping for furniture, home improvements, credit cards, you name it, in the weeks before your home closing. A string of inquiries can mount up and knock your home purchase right out of the water.

If you’re checking your own credit, either through AnnualCreditReport.com (where they are free once a year) or by buying them from Equifax, Experian or TransUnion, your FICO score goes untouched.

Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Do you know what makes up your credit score?

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Before a buyer even begins to look at homes, it is critical to know if they qualify for a mortgage, and how much of a loan they qualify for. There are several proactive steps that can be taken in order to prepare for getting approved for a mortgage. If followed, these tips will successfully guide you to realizing the dream of homeownership.

Even though you will need to meet your loan officer in person, there are steps to take to prepare yourself ahead of time. You may need to fill out an online application, or you may be asked to begin an application over the phone. Documentation will need to be submitted to the loan officer either in person, by email, fax, or mail. The loan officer will request documentation and items such as tax returns for the past several years, pay stubs, bank statements, retirement or investment fund information. The loan officer will also review all your debts versus income to determine what is called your “debt to income” ratio (DTI).

In addition to calculating your DTI, the loan officer will review your credit history to ensure there are no defaults on previous loans, late payments, etc. Occassionally there are items which appear on the credit report that are mistakes or items that have indeed been paid off but are still being reflected. When this occurs, you will need to contact the creditor to make the correction. These problems will need to be addressed and cleared up before the lender will approve your mortgage.

With the above information, the loan officer will then be able to let you know whether or not you will most likely be approved for a loan. Final approval is issued after your loan application has been submitted to an underwriter. Depending on the outcome, you will then be able to either move forward with an immediate approval, or become aware of outstanding items that need to be corrected. It’s not unusual for a few sticking points to appear when applying for a mortgage. Some of these items may include:

  • Tracking down required documentation, such as tax returns, pay stubs, legal decrees
  • Creating a history of paying all bills on time
  • Finalizing a divorce or any other lawsuit
  • Waiting for a bankruptcy or foreclosure time frame

Although lenders are in the business to lend money, they want to make sure the borrower is going to pay back the money loaned; therefore they do require you meet their lending guidelines.

The best tips to prepare for getting approved for a mortgage are relatively simple: pay your bills on time, have a good employment history, maintain proper documentation, and make any repairs necessary on your credit report. A good loan officer will assist in guiding you through these steps so that when it comes time to move forward and begin searching for that perfect dream home, your financial picture will be in excellent condition, ready to be approved for a mortgage.

Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

There are quite a few credit repair secrets your creditors and the credit reporting agencies do not want you to know about. When you start taking measures to repair your credit, it can cost both the creditors and the reporting agencies a great deal of money.

There are many different credit repair secrets they do not want you to be familiar with, but the one we want to focus on here is the ability to dispute negative items on your credit report.

You can significantly improve your credit by disputing the negative items you find on your credit report. Using a correctly formatted letter is the way to accomplish this, and when you do so it is always a good idea to keep a copy of the letter you send.

You may also want to send along a copy of your credit report so they can see where the problem is. The following are a few simple steps to help you effectively dispute the negative items on your credit report.

Step #1 – Get a Copy of Your Credit Report – Once you have your report, make sure you look it over for any mistakes. For every separate listing on your report, check out the information to make sure it is really yours.

At times you may find a wrong listing will end up on your report, so if you take care of these first, it will probably help to get rid of the other negative items.

Step #2 – List the Items You Want to Dispute – After taking care of wrong listings, then you can start looking at the negative items on your report and make up a list of things you want to dispute. You should put the most harmful items at the top of your list to be taken care of first.

Then it is time for you to start writing. Each separate item should be addressed in a separate letter, and you should be sure to send the letter to each of the credit reporting agencies. Remember, this is one of the many credit repair secrets because agencies do not want to be disputed, but doing so is legal and will help to repair your credit.

Step #3 – Personalize and Use Strong Language – One of the reasons these credit repair secrets are so “hush hush” is because creditors and credit reporting agencies do not want to investigate or get rid of the negative items on your credit reports.

You are going to have to use strong language and a great letter to get through to them. Although they may give you some trouble and tell you that you are not allowed to dispute items, remember what you are doing is legal and they are required to investigate the problem. Let them know with your words that you mean business.

It will take a few weeks for everything to get underway, but after the credit reporting agency investigates, then a new credit report should be issued. Make sure you check out your report to be sure negative items have been taken away. This is one of the best kept credit repair secrets, but once you learn how to use it, you can effectively repair your credit report.

Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.