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How mortgage borrowers can hurt their chances for obtaining credit

March 2, 2018 by Scott Sheldon

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Why you shouldn't be solely focused on credit when it comes to getting a mortgage

Avoid these common credit blunders when applying for home loan

The mortgage industry relies on accurate credit reporting to make credit decisions when granting people home mortgages. Here’s some of the things that can hurt your mortgage chances and how to not only your credit score, but your odds of getting approved…

With the amount of information online with regards to credit, many consumers are getting more and more information about how to manage credit, get credit, and how to manipulate and or improve their credit scores. The amount of information that’s out there can be so overwhelming that you might think you’re doing something positive for your credit, but you could be doing something detrimental and wouldn’t know it until it comes time to apply for a mortgage.

Following is what you need to know what’s regards to keeping your credit score as high as possible and getting a mortgage

  1. Do not apply for a mortgage when you have disputed credit accounts. Disputing credit accounts artificially makes your credit score rise because during the time the account is in dispute the obligation is invisible to scoring. Additionally, the lender cannot run an automated underwriting system so they get a misread on your true financial picture for qualifying. Take all your accounts out of dispute first then let your lender run credit then run automated underwriting in that order.
  1. Freezing credit- freezing your credit due to identity theft for example such as the Equifax scandal from last year is a wise move. However, if you are applying for a mortgage make sure to remove all frozen credit. A lender cannot obtain all the three credit scores needed when accounts are frozen.

 

  1. Refusing to let the lender pull a copy of your credit report for fear that you don’t want your credit report pulled too many times. A lender cannot give you any loan qualification for pre-approval or really give you any specifics on what they can do for you without pulling a copy of your credit report. Pulling a copy of your credit report does not automatically make your credit score drop when applying for a mortgage country to widespread belief. When people are applying for mortgage along with applying for other types of credit at the same time, then your score can take a small hit. This is because it appears you have financial mismanagement to the credit bureaus when aggressively consenting to multiple credit pulls.

If your credit score needs work most lenders can recommend options for getting your credit score up by paying down credit cards in most cases which can and sometimes raise your credit score anywhere from 5 to 10 points all the way up as high as 40 points in some cases.

Looking for a mortgage to buy a home? Begin today.

Related Mortgage Advice from Scott Sheldon

  • Why Disputing Credit Accounts May Stop Your Home Purchase

    What Are Disputed Credit Accounts? *Credit Accounts (that report on the credit report) in which there…

  • Why Applying For A Mortgage Does Not Automatically Tank Your Credit Score

    There is a fair amount of misconception that applying for a mortgage causes your credit…

  • Tax Forms and Tax Losses
    Tax return losses may hurt your mortgage chances

    Qualifying for a mortgage involves: an acceptable credit score, sufficient assets and stable income. These…

  • Does My Loan Type Hurt My Credit Score?

    Future favorable financing deals, low rates and preferred credit offerings all will be available depending…

Filed Under: Loan Programs, Loan Qualifying, Uncategorized Tagged With: BAD CREDIT MORTGAGE, buying a house, buying your first home, credit, credit score, mortgage comparison shopping, qualifying for a mortgage, Santa Rosa mortgages, sonoma county refinancing

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Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
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