| John Harris had never missed a payment. He's never | | | | mortgage broker or banker. Your loan gets approved. |
| been late on his mortgage, never went past due on his | | | | Prior to closing, the lender that will ultimately "buy' the |
| car loan and his credit card companies are all happy | | | | loan, pulls your credit. The score they come up with is |
| with the way he pays his bills. | | | | a few points below your broker or bankers credit |
| But John Harris recently applied to refinance his | | | | report score. Sorry... rejected! Now the broker or |
| mortgage. He was declined. His credit scores were | | | | banker has to scramble to find another lender willing to |
| 615, 619 and 658. Not bad. But not good enough. How | | | | purchase your loan. This happens fairly frequently. It all |
| could this be? | | | | happens behind the scenes - you may or may not be |
| The answer is simple. Too simple, really. But it shows | | | | told about it! |
| how important your credit score has become in | | | | If you're not being told, all you know at that point is that |
| today's credit score driven world and how just a | | | | it is taking a long time to get to closing. |
| couple of points can mean the difference between | | | | So... when considering your credit score and the |
| "Approved" and "Declined". | | | | implications towards being approved for your |
| In John Harris' case, it came down to 1 point. See, | | | | mortgage, here are some things to watch for: |
| lenders don't average your 3 credit scores... they'll use | | | | * 5 - 10 points on your credit score can make a huge |
| the middle score to determine eligibility for most | | | | difference when it comes to getting a mortgage. |
| mortgage programs today. And just 1 measly point | | | | * Your score, more than likely, will differ from one |
| higher on his middle score and he would have gotten | | | | credit pull to another. Not much you can do about this |
| his loan. | | | | other than: |
| Mr. Harris was not aware that by accepting low | | | | * Find an ethical, professional mortgage professional to |
| interest credit cards and doing balance transfers he | | | | work with. He or she will review your credit report, |
| negatively affected his scores. When "underwriting" | | | | inform you of any difficulties that may arise and usually |
| mortgage loans - meaning reviewing the loan to either | | | | will know someone in the credit repair business that |
| approve or deny the loan request - a lender will, in | | | | they have worked with in the past. I created to give |
| nearly all cases, request your credit score from the 3 | | | | mortgage shoppers expert advice and an easy, safe |
| major credit bureaus - Experian (formerly TRW), | | | | and secure method to shop for mortgage rates |
| Trans Union and Equifax. Credit scores typically vary | | | | without getting hounded by a bunch of sales people. |
| between the 3 bureaus and as stated, lenders use the | | | | * Before you apply for a mortgage, obtain a copy of |
| middle of the 3 scores as the primary indicator of | | | | your own credit report. You can obtain a free credit |
| credit-worthiness. And these days, 620 is the lowest | | | | report once each year from |
| rate allowable for most mortgage programs. | | | | * Repair your own credit. That's right, it's entirely |
| There are other credit score perplexities. And it can | | | | possible to do it yourself rather than pay some credit |
| get quite ridiculous. It's entirely possible for a person to | | | | repair company hundreds, even thousands of dollars to |
| have a low score of 619, a middle score of 619, and a | | | | do what you can easily do yourself. The most |
| high score of 650. But that's a 620 to a lender! On top | | | | informative program and one that provides you with |
| of that, most programs have higher rates the lower | | | | everything you need to get negative items deleted |
| that middle score is. So even though Mr. Harris' credit | | | | from your credit report is available here: |
| report looked quite clean, his score was lowered | | | | ExtremeCreditMakeover.net |
| because of credit card shuffling. | | | | OK... now that you have your credit report in hand, a |
| Years ago, underwriters - the people that make final | | | | great understanding of how credit scores work, and a |
| approval and rejection decisions for lenders - had | | | | top notch mortgage professional as your guide, you |
| some flexibility; some ability to make common sense | | | | are now in the top 10% of mortgage borrowers - you |
| underwriting decisions. That person could have decided | | | | never even think about being declined for a mortgage |
| that the one point shouldn't preclude Mr. Harris from | | | | - and you will be able to obtain the lowest interest |
| getting his loan. But it rarely works that way anymore. | | | | rates available next time you apply for credit. Good |
| Here's another crazy scenario. You apply with a | | | | Luck! |