A recent article in the New York Times, reports that "about 26 million Americans lack a credit file." Ann Carrns continues by adding that these "credit invisible" consumers...lack any credit history with the major nationwide credit reporting agencies, which tends to shut them out of the economic mainstream. These findings are according to a report issued on May 5, 2015 by the Consumer Financial Protection Bureau. "An additional 19 million Americans, or 8 percent of adults, have some credit history, but not enough to create a score. Eighty percent of adults, or about 189 million people, have credit scores."Read more »
Whether you are looking to open a credit card, finance a car or buy a home...you've probably noticed that your credit score is important. A credit score is essentially used to assess how likely it is that a borrower will repay a loan. The score measures the relative degree of risk that a potential person represents to a lender or investor and is based on several areas of information (however, because of several laws against discrimination - it is not based on gender, race age or zip code.) Credit Bureaus & Score Range Fair, Isaac Credit Bureau scores range between 300 to 850 points - the higher the score, the less risk associated with the borrower. Below are the three national credit data repositories that contribute to your score: Equifax - 800-685-1111 Trans Union - 800-888-4213 Experian - 800-397-3742 Each of these bureaus may offer you a slightly different credit score depending on the data within their own credit profile. Keep in mind that a score is based on all credit-related data - not just negative data. Read more »
You're ready to buy or refinance – but whether this is your first or fourth loan – you may find that working with a loan officer to be confusing and difficult. Having a clear understanding of what you want and how to communicate with your mortgage professional is critical for success. To keep everything running smoothly – make sure you discuss the following topics with your loan officer.
1 - Communication Style
Mortgage professionals will communicate with you in a variety of ways including by phone, email and text. Some are tech savvy and others prefer traditional methods. The point is to be clear about what YOU prefer. If you respond more quickly to text messages versus voicemail - tell your loan officer. Often times, there are time sensitive issues that arise during the loan process, so it will make everyone happy if your loan officer knows how to get questions answered, additional documentation etc. in a timely manner.
: Poor credit history and a bad credit score can have a serious impact of your life. No one wants bad credit. Sometimes mistakes happen. Sometimes factors like medical bills, job loss and tragedy influence our financial profile in ways we never could have predicted. Bad credit can happen to anyone. But now what?
If you’re wondering how to repair your credit score, you are not alone. The widespread decline in credit scores has been one of the side effects of the recession but this doesn’t mean that you can’t pro-actively take the steps to start repairing your credit.
Factors that Damage Credit
First let’s clarify what can lower your credit score and damage your credit profile.
Read more »
- Excessive Debt: If your credit cards are maxed and you have several loans, your debt profile is probably contributing to your low score
- Late Payments: The credit bureaus note any 30, 60, 90 & 120 day payment lates. It is essential that you pay your bills on time.
- Dormant Credit: A dormant credit card is an account that has infrequent or no use. In some cases, if an account has no activity for a period of time, issuers may close the account which revokes future charging privileges. Dormant accounts may not have additional debt but they also don’t help your credit score.
- Collections: If you fail to make a payment or pay off your account – the creditor may send your account to collections. This severely affects your score. Make sure to work closely with your mortgage or credit professional regarding paying off collections. Note: Collections on federal loans such as student loans will prevent you from getting financing from most (if not all) lenders.
Yahoo News (Homes Division)
reported this morning that buying a home is actually getting easier. They add that if you've gotten turned down for a mortgage in the past few years, now may be a good time to re-apply. "That's because, according to Ellie Mae research, in July 2014, 67 percent of all mortgages applied for closed. That's way up from six months before in January 2014 and also in July 2013, when the rate of mortgages that closed were at just 53 percent at both times."
(Source: Yahoo Homes)
According to the president of Ellie Mae, Jonathan Corr - this is due, in part, to lenders easing their qualifying standards.
Yahoo goes on to point out three key reasons the industry is getting more flexible: Read more »
Whether looking to buy a home or refinance, you will likely apply for a mortgage loan and encounter about the underwriting process. Lenders and loan officers might mention "underwriting" but few home-owners and buyers might actually know exactly what this step is and how it impacts their ability to secure financing.
What is Underwriting?
Underwriting is a process that allows lenders to determine if you qualify for financing based on your level of credit risk. An underwriter is a skilled in-house person who looks at every aspect of your financial profile to determine if its possible and likely that you can repay the debt. The underwriter will consider your mortgage application and verify the information you’ve submitted. This can include verifying with your employer that you are currently working. They may also compare bank statements and tax records to ensure you have substantial income to repay the loan. Read more »