Frankly My Dear Lender, We Didn't Care About That "Piddly" $17.00 Payment

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Frankly My Dear Lender, We Didn't Care About That "Piddly" $17.00 Payment

With anxious Tucson home buyers yesterday, I saw the lender's smile turn to a scowl as she reviewed their credit report. Clearly, the Buyer's "forgot" to mention a few things. When the lender asked them about late payments on two credit cards, the Buyer's responded,

"We didn't care to pay it- it's just a piddly $17.00 a month." Oh. Okay. Hmmm.

The lender, now looking at her watch, sharply said, "Well if you don't care to pay $17.00 a month how do you intend to convince me you are going to pay $600.00 a month?"

So yes, if you want to buy a home and get a loan - it's a good idea to care about that "piddly" monthly payment. Especially if you have a bankruptcy or other issues on your credit report.

If you are unsure about what your credit position is and you want to purchase a home - the first thing you need to do is make sure you know what "good credit" is:

Call and meet with a lender. They'll be honest and tell you point blank if your credit is good and what you need to do to fix issues if it isn't good.

If you are self-employed, keep in mind, the "income" lenders use is what you report and file on your income tax returns.

Once you've made the commitment to buy a home and fix your credit -- DO NOT go out and start buying more things. Especially big things likes cars, TVs, etc.

Don't get frustrated. Your credit didn't get bad overnight and it's not going to get fixed overnight. It will take discipline and patience.

Stop searching the Internet for homes until you are ready to buy. This will only disappoint and discourage you from staying focused on what you need to do first. Keep in mind - there will always be a great deal on the perfect home for you!

And - pay all your bills on time and every time!

Buying or selling Tucson real estate, Mt Lemmon, Tucson bank-owned homes, Tucson rental homes, or Tucson lease option homes? Visit www.KGCPropertiesLLC.com!

This blog is written with my opinions and my opinions are presented with accuracy but not guarantees. Please talk to a professional before making any real estate, financial or agency decisions. Gabrielle Kamahele Rhind - 2011. If you want to reprint parts of this - just email me for my permission: TucsonsRealEstate@gmail.com.

Posted by Gabrielle Kamahele Rhind, Broker/Owner on 01/08/2010 05:09 AM

Comments (131)

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131 Comments on Frankly My Dear Lender, We Didn't Care About That "Piddly" $17.00 Payment

JAN

2010

You have to love the "it was only $X....and I was late just a few times....but that was only because...." bla, bla, bla.....

I agree. Buyers should first work out credit issues before looking for homes . Good tips.

GOOD MORNING SALLY & DAVID! Yep - you've got the "blah blah blah" part exactly right -- I think that's all the lender heard after that! Thanks for the comment! -- Gab

GOOD MORNING GITA! Always, always start with a lender! -- Thanks for the comment! -- Gab

OOPS!!! I bet you could have heard a pin drop...

Helping you help others live their American dream...

Gabrielle,

I sure hope you got this reality fix before spending hours or days running around showing them properties.

Gab,

I'm really surprised that so many people have issues on their credit that they never knew. Thankfully, most of them are correctable but they take a lot of time to fix.

Rich

Folks who don't understand the importance of making credit payments timely will find every excuse in the book to rationalize their not-payment.

The one that causes so much trouble is the "disputed" claim. When I tell them that they must first pay and then dispute, they are shocked, shocked.

As I told one caller last week, "Well, if your furnace dies, are you going to stop paying your mortgage payment because you "dispute" the inspection report????

Excuses, excuses.

Fact is, they'll have to pay up and wait for several months to "cure".

Very good reminder about the importance of small details. . they are very significant when it comes to your credit

Oh my...good for the lender putting it in terms I hope they understood. Ditto for your good advice about staying off the internet until you know what you can afford! What's the point of getting all excited about a home only to find out you wouldn't qualify for a car payment!

Good morning all hope all is well. Michael said, "OOPS!!! I bet you could have heard a pin drop..." I don't think that was a pin. LOL!

A fine example of wrong thinking. Talk about a movable marker on what is acceptable. What is the standard for 'piddly' amounts? And where is it in anyone's contract that it's okay to ignore 'piddly' anyway? Wow.

Good post. Today's underwriting looks for reasons to turn a deal down. It is important to put your "best financial foot forward"

Tony

Are people living under a rock or what? We are bombarded with advertising for credit repair companies, companies to check your credit score, not to mention the 24/7 media coverage of the financial situation. What are people thinking - oops, they're not and these people really don't care.

It's so important for young people (high school age) to realize the importance of paying in a timely fashion to maintain their good credit rating....high schools should require a basic course in financing and how to maintain creditworthiness.

Unfortunately, some people lack basic intelligence. If you get them to closing that couple will come back to bite you later. I would suggest that they rent.

I am working with a couple that had a BK 4 years ago but since then they have done there work diligently. Just got final approval yesterday! Yeah!

People are going to get a harsh wake up call in today's credit environment. Every payment matters

Well, that's rich. The mortgage rep is looking at his watch for time spent or wasted and we get to look at our calendar for the days we spent showing homes. I hope you made them feel like the princess she thought she was so you could close on a sale sometime in the new year.

Every payment matters these days!! Big or small they seem to have the same significance to the bureaus! Thanks for posting! Good Advice!

I'm always amazed how people downplay the importance of credit...unless of course you are millionaire and don't ever need to borrow money.

How is it that the education our children are receiving in the public school systems is more about memorizing trivia and very little about lifelong financial skills ??!!!

Gabrielle,

Congrats on the feature! Very good advice you have in here, but I remember searching for my first house... it is difficult to stop searching and looking and actually stay focused to task on hand

GOOD MORNING MICHELE! It does surprise me from time to time that people are more concerned about meeting the minimum on credit scores rather than having really good credit! -- Gab

GOOD MORNING STEPHEN! Agreed- everything matters! Thanks for the comment -- Gabrielle

GOOD MORNING GREGORY! Luckily, the only time spent was going with the Buyers to see the lender. I wanted to meet her anyway! It'll be a while before they can buy anything. --Gabrielle

GOOD MORNING BOB! Agreed! Thanks for the comment -- Gabrielle

GOOD MORNING LAURA! Congratulations to you and the Buyers! Hard work pays off! -- Gabrielle

GOOD MORNING GLEN! They are renting and I am sure their landlord is happier - at least for another year! -- Gabrielle

GOOD MORNING BARBARA! Thanks for the reality that learning this starts early! -- Gabrielle

GOOD MORNING SUSAN! Not sure what people are thinking at times. These folks really felt like because they made other payments on time this shouldn't have mattered. Sigh. I'll let them debate that amongst themselves as long as they like. -- Gabrielle

GOOD MORNING TONY! If people only knew how important this is! Thanks for the comment -- Gabrielle

GOOD MORNING DAWN! I had to bite my lip when I heard them say "piddly" - and I loved the lenders response! --Gabrielle

GOOD MORNING FRANK! More like the shredder with their loan application! -- Gabrielle

GOOD MORNING SARAH Gray! I too loved the lenders response - talk about hearing a pin drop after that comment! Speaking of comments - thanks for yours - Gabrielle

GOOD MORNING FERNANDO! The smallest things make the biggest difference - holds true here too! -- Gabrielle

GOOD MORNING LENN! And the excuses were rolling out of these Buyer's mouths. None of which the lender was listening too. -- Gabrielle

GOOD MORNING RICH! And it's usually the really small things that many thought they took care of - or got fixed on their own. That's why it's so important to check from time to time! -- Gab

GOOD MORNING MIKE! The lender is always the first stop - whether in person or by phone - before we go look! -- Gab

GOOD MORNING MICHAEL! More like the shredder! Thanks for your comment! -- Gabrielle

I had a client take out one of those stone credit cards to get the 20% discount, somehow the first and only charge statement never got to him...and months after attempting to him my client for the $60, the store sent the request to a collection agency. The $60...missed payment took months to repair, and opportunities to purchase were missed during the process.

Gabrielle, I loved the lender's response! THat was classic! It is amazing how people don't realize that even just $17 a month makes a huge difference -- because it shows your INTENT (i.e. pay or not pay)...

Great post, and yes START with a lender BEFORE moving any further!!!!

GOOD MORNING MICHAEL! Life skills in high school seem to have taken a back seat. It's still a parent's job to teach this though. I met a lender from a bank here in Tucson that as a volunteer, goes into schools and teaches kids how to use a checkbook. And she starts her talk by saying, "Step #1 - you have to have money in a bank before you can use these!" She's doing a good thing for kids to help them! -- Gab

GOOD MORNING PAUL! Nice to see you here! It is very hard not too search. I still search for homes I can't afford! I so understand! -Gab

GOOD MORNING STEVE! Oh those "save by opening up a credit card" deals are the worst "traps". What people save on the spot usually costs ten times more later. Like in this case. --Gab

GOOD MORNING MARNEY! Wasn't that a great response form the lender?! I'll keep going back to her! Thanks for your comment! -- Gabrielle

It seems that a certain numbers of borrowers have never been taught that their past record of payments will be used by lenders to determine their future credit worthiness.

Great post Gabrielle. That piddly $17.00 is going to cost them much more in the long run.

Wow, talk about clueless. Customers need to be told that they need to verify their credit and speak to a mortgage officer for pre-qualification before they get in our cars. If these steps are skipped, it is guaranteed frustration for all. Good post.

Good for that lenders response....hopefully it will wake these people up. I also agree that paying all debts on time is a necessity for future credit and should be taught to us in our early years of education(somehow).

The lender's response was great. These folks needed to hear point-blank that their way of thinking needed to change.

It's very important to keep all the payments up to date in order to create a good credit score. Otherwise, the penalty is no house or higher interest rates.

So, very interesting. Most lenders, would see these individual as a risk.

Gabrielle, I got a call from someone yesterday who told me that she moved back home 2 years ago and didn't have any expenses. She has been working but still didn't think it was a big deal to pay any of her old bills. So, nothing has been paid in 2 years and you want to look for a house??? Yes, paying those little student loans and medical bills still count!

I would call those potential borrowers' attitude, "deadbeat arrogance". It would be funny if it wasn't so ridiculous.

These people decided to be financially incompetent on purpose and then turn around and arrogantly expect the world to lap at their heels. Truly laughable, yet there are millions of people just like them. Countless grown adults with great business smarts fail miserably when it comes to their own household finances.

One year minimum of personal finance courses should be a national mandatory requirement (not an elective) for obtaining a high school diploma, period.

Okay, I'm going to go against the grain here and instead of calling these buyers clueless, I will say they likely represent a lot of people who have never applied for credit and/or never been turned down for credit. I agree that we need to start teaching our kids about financial management in high school...before the damn banks start sending them pre-approved credit card application. Great, great post, Gabrielle, with really succint points. I'm reblogging and posting to my outside blog too! -- Tanya in Montreal

Garbielle - So true ! The little things become the big things ! Especially as it relates to a credit score !

Good Morning Gabrielle! Wow, what a telling statement coming from their mouths. I agree with Tanya, I think much of our population has entitlement issues and have never felt ramnifications of ignoring "piddly" issues. It's a sad statement that our children are taught birth control as early as 5th and 6th grade, but never taught financial management.

very good information and tips!!

Buyers have selective memory about what happen, when and why. My favorite one of those "I forgot" was a client that conveniently forgot to mention that they had a bankruptcy in their "recent" past. When confronted with the fact, the response was "oh yeah, but that was so long ago", but, unfortunately for them not long ago enough for the credit reporting bureaus to have forgotten about it!!!

Great advice Gabrielle! I can't believe they said that, lol. That piddly $17.00 can kill a credit score if it's overdue. Not worth it.

That measly $17.00 payment is more powerful than most buyers would like to believe--and it takes months for their credit history to forget and forgive.

Some buyers are ignorant about what lenders look at and do not understand what a credit report shows them. I am always amazed by buyers and what they say and do or not do.

Gabrielle:

It is a tough lesson to learn for someone who has never applied for a loan before, but we need to protect our credit with our life. That means making every payment on time even if you disagree with the payment. (Dispute it but make the minimum payment until the issue is resolved.) Ruined credit can make life extremely difficult and it would be great if learning institutions would ingrain that message into people at a very early age.

Well, it is good the lender put it simply in laymen terms...and hopefully...your buyers will learn a lesson from this meeting. Not paying on credit bills is like stealing. You can't have something for nothing--although some might try to argue that point. ;)

In my experience, this credit ignorance happens all sorts of people, even those with a terrific income. I have had clients who earn in excess of $500,000 a year but have poor credit scores because of excessive debt and missed payments.

The saying that comes to mind is:

"How you do anything is how you do everything"

Hi Gabrielle, it's the "piddly" payments that get people into trouble. This lender had a good come back. Congratulations on the Feature.

Wow...what an attitude and it just goes to show that the buyers were too arrogant to follow guidelines, choosing instead to go by their own set of rules. Better luck next time!

That "piddly" $17.00 late payment is going to be haunting them for years.

Good post Gabrielle. A clean credit report has become so critical these days. Hope they learned a lesson.

I have some favorites as well, like, "Oh the reposession was several years ago ...", or "That isn't my account, I was only a co-signor". My favorite situation all time was the client with the 523 credit score that I did a stated loan for, that showed up to settlement in a brand new car. Must be nice, haha.

Gabrielle,

I have meet that borrower (more than once)!

You are giving good advice to all home buyers.

Thanks,

Lee W.

After being a financial advisor for 9 years before becoming an agent I was well aware of how bad some people's financial situations can be. I angered a few prospects refusing to show them homes until they had a written pre-approval from their chosen lender. I didn't want to waste their time or mine driving around looking at homes they couldn't afford. I certainly hope you didn't waste a huge amount of time driving these people around.

Gabrielle - What fabulous advice: stop searching for homes until you are ready to buy. I find buyers get upset when they "lose" a house that they were never qualified to buy.

Some people just don't think.

Good post Garbrielle, I do my best to teach my kids this. Even if it is small, make the payment ON TIME.

Some folks learn the hard way.

Gabrielle,

Great point on basic financial acumem. A college friend went on to a very good Med school, while there he was purchasing left, right and sideways. I asked how he got all this stuff, he said it was "FREE!" I was only 21 and remembered being shocked by his attitude.

Unfortunately, I've now heard he lost his medical license, but it's like Tim Matski, #48 response says: How you do anything is how you do everything.

Scary!

All the best, Michelle

The last time I ordered checks was over 5 years ago, With auto bill pay online banking makes it easy to be on time. The trick is to use it, and schedule payments.

Isn't that incredible? How many young people think that the "due date" is really just a suggestion? probably a few older people who should know better.

This is so true. Those payments must be made (the legitimate ones), and the problems that are yours must be addressed.

Making a payment on something that does not belong to me is not an option, however.

Lenn wrote: "The one that causes so much trouble is the "disputed" claim. When I tell them that they must first pay and then dispute, they are shocked, shocked."

When I was searching for a home years ago, my father's child-support non-payments were on my credit report. Do you even think I would have made a payment on it? On a cold day in hell, I would. I disputed that foolishness on the spot, when I found out about it. Doing that enabled me to improve my credit dramatically, to say the least.

I do everything online bill pay to ensure on time payments. Life can throw one some curve balls all at once. Great post

All good points. And, don't buy anything until AFTER the home purchase closes!

I love the lenders response. Great points and I like the idea of telling buyers to stop looking for homes because it will only get them frustrated.

Being a LO, it is funny the things you see. Not paying $17 is just --dumb! However, you would be surprised the number of folks who are proud of their legacy and name their children after them selves, grandparents, or aunts or uncles. It is also VERY easy for a creditor to report the wrong person. It is not funny but I have seen a home purchase fall thru because a negative posting was done three days prior to funding and it was his uncle's mistake. Too bad...So sad...they lost the home

Great post for upcoming borrowers.

All excellent points. The importance of paying on time with at least the minimum is vitally important to maintaining good credit.

What an excellent post. This is advice that I pass along to any potential client.

Gabrielle: I can tell you from personal experience as a mortgage banker ... people not only make poor judgement calls regarding payments ... they develop total amnesia. I've also been totally amazed at how forgetful they can become when confronted with a credit report. I'm afraid the proverbial "chicken has come home to roost" ... as credit restrictions have tightened up drastically and harken back to the credit rules of decades ago. Although painful in the short term, I believe we all will be better off for this re-adjustment of thinking in the long haul.

Great post ... and I hope many many read it and took it to heart ...

Gene

Gabrielle,

These are all great points. Especially about looking at homes before you are in a position to buy. I hope buyers take heed to your wonderful and practical advice!

Excellent post . And we strongly recommend all our folks get prequalified and get the $$$ in order first. I could not agree with you more

I have had a buyer or two get caught by going and getting a new credit card after the loan approval. Sure they had just exited a marriage and needed a card in their own name...but it still was a kink!

I must admit I've run into more buyers locally that have NO credit than ones that have bad credit. I suppose its easier to get credit than repair credit but either way it takes time.

I think our public schools should teach classes in personal financial responsibility. Wouldn't it help the economy if all high school students were required to demonstrate proficiency in personal finance management?

GOOD MORNING GARY! Your message is very important - the most innocent thing can cause a kink - Gab

GOOD MORNING CHARLIE! Thank you! And yes - get this done first -- Gabrielle

GOOD MORNING KAREN! I do as well - thank you! -- Gabrielle

GOOD MORNING GENE! I too am beginning to realize that amnesia is very common! And selective! Thanks for your experienced input! -- Gabrielle

GOOD MORNING BARBARA! Great adive and thank you for leaving a comment -- Gabrielle

GOOD MORNING TRISHA! Thanks! -- Gabrielle

GOOD MORNING MICHAEL! Goes to show we can't be too careful about the things we do! Thanks for the "experience" input! -- Gabrielle

GOOD MORNING TIM! I did as well - I love people that can send a message right back! Thanks for your comment - Gabrielle

GOOD MORNING DOUGLAS! Ah yes - another important point! --Gabrielle

GOOD MORNING HARRY! Good way to get things done on time without having to worry about it! -- Gab

GOOD MORNING WILLIAM! I loved your story - that cold day comes sometimes and we need to do what we need to do and fix it later! Thanks for the great share! -- Gab

GOOD MORNING KAREN! I love it - and yes - the kids that think paying for manicured nails is more important than paying credit card bills on time leave me speechless. --Gabrielle

GOOD MORNING JOE! Agreed. I've been paying things online for years now and it's much easier! Saves stamp money too! -- Gab

In a society of "entitlement" it is so difficult for people to use disipline and control their finances.

Great article! Thanks for sharing.

Oh I love the lenders come back. It makes you wonder what goes through these peoples minds. What is that "Important amount" 17c, clearly not, $17.00 apparently not, $170.00 who knows - maybe not! Hope you did not waste too much time with them.

GOOD MORNING MICHELLE! Wow - and he could have really made something better with his life! Wonder what he is doing now! And I agree with the quote too! -- Gabrielle

GOOD MORNING MISSY! When my daughter was 7 she said she wanted a magic card like mine. "You just run it through a machine and the store gives you whatever you want." MmmHmmm. From that day on - she's learned it's not magic and hopefully will help her not learn the hard way - like you wrote! -- Gab

GOOD MORNING CARLA! Yep - Gab

GOOD MORNING MARGARET! Oh I know. Especially when they use those loan calculators and think they can afford more than they really can! Thanks for your comment! -- Gabrielle

GOOD MORNING CHRIS! I had a good mentor - the first thing he said to me was "never drive anywhere with clients unless it's to a lender first!" So - I was in good shape! Thanks for wondering - Gab

GOOD MORNING LEE! I bet! Thanks for your comment! -- Gabrielle

GOOD MORNING STEVE! I think all lenders should get together and write a book on the best quotes heard for not paying bills! Thanks for your comment! -- Gabn

GOOD MORNING TODD! You know - I hope so too. Thanks for your comment - Gab

GOOD MORNING ROGER! Yep - especially when they are still renting 10 years from now. It's sad - but there is only so much we can do! Thanks for your comment! -- Gabrielle

GOOD MORNING RUSSEL! Yep - that was some attitude. Thanks for the well wishes! -- Gab

GOOD MORNING MICHAEL! Nice to see you here! -- Gab

GOOD MORNING TIM! Isn't that the truth! -- Gab

GOOD MORNING PAUL! Thanks for that perspective - I agree! Many folks with good incomes have the same problems! -- Gab

GOOD MORNING SONJA! Gotta love a lender who talks to people in a way they will understand. Or at least stop them from arguing her point. --Gabrielle

GOOD MORNING CLAUDETTE! Very sound advice. One piece of advice I give to anyone I can is - you only need one credit card. One is a lot easier to manage than 15. Thanks for your input! -- Gab

GOOD MORNING BARBIE! I'm getting less amazed but from time to time - I am snapped right out of it!! --Gab

GOOD MORNING NORMA! It's always the small things that can hurt the most! Thanks for the input! -- Gabrielle

GOOD MORNING JACKIE! Just pay it is what I tell people! --Gabrielle

GOOD MORNING STEPHEN! Lenders are great at reminding people about things they "forget"! --Gab

Happy New Year Gabrielle! Excellent article! You're right on! I come across this situation frequently and am amazed how many times buyers take the same attitude and rather than fix the problem, they prefer to seek out the bottom dwellers of the lending food chain that will approve their loan with low FICO's.

Gabrielle,

This article could have been titled "just an average day in the life of a Lender." Funny, how many people will "forget" about these pesky payments, and yet have no hesitation in expecting a lender to believe them that they would never miss any of the "important" payments.

Some borrowers just can't be coached -- the ones that need it most. I discuss credit carefully with all my buyer-clients, and specifically warn them about taking on new debt or even opening new credit lines before closing their home purchase, but still had one call a few years ago -- a week before closing -- excited to have me come see the new car they just bought! All I could think was, "I hope you enjoy sleeping in it!"

I don't what Lenn means about "pay first then dispute," when you certainly don't have to pay a disputed item in order to get the credit bureaus to establish the validity of the debt. Of course, if you are in the middle of buying the home, and the lender says you need to pay something on your credit report and the client disputes its validity, then by all means, pay now and dispute later.

Hi Gabrielle...It is important to pay more than the minimum every chance they get. The minimum gets you nowhere.

My philosophy is, if you cannot afford to buy something outright you might not be able to afford to charge it. I think many people have found this out the hard way.

Kate

Absolutely amazing Gabrielle! Why do people think they can not pay some things and it will not impact them later on? I never have figured that one out...

Thank for your post Gabrielle ~ There are actually many, many people out there who feel the way your buyers feel...'but it is only a piddly...". And they are the ones who want to buy and buy more.

Sometimes I think buyers think that the lenders are as desperate as some Sellers.

They figure they can just apply for a mortgage loan and the lenders should be happy about that. It is really amazing how many buyers ar uneducated about the homebuying process.

THE UNDERWRITERS LOOK AT EVERYTHING AND I DO ME EVERYTHING. THE PEOPLE MUST BE EDUCATED ON HOW THINGS HAVE CHANGED IN THIS INDUSTRY. SOME POEPLE JUST DONT HAVE A CLUE AND IT SEEMS THESE ARE THE PEOPLE OUT LOOKING FOR HOUSES. I JUST LOVE THOSE PEOPLE THAT WANT TO BUY A HOUSE, BUT HAVE THESE HUGE CAR PAYMENTS. DO YOU WANT A NEW CAR OR A HOUSE PEOPLE????????????????

Good grief what were they thinking? Even a piddly $17 is a problem if it is not paid.

What a great post with a lesson to be learned. It does still surprise me sometimes at how often I hear this when working with customers who have decided it's time to buy a home and they just figured it to be no big deal.

I just had a buyer explain the me that his student loans going into collection weren't his fault. He "moved" and didn't leave a forwarding address and never notified the student loan company. Now he's upset because they won't remove that little item from his credit report. His last question to me was "How am I going to get my $8000 tax credit?" My answer was "You're not."

Sometimes I find the ones the most eager to buy are the ones who would be the last to be approved. Maybe it is because they were most eager to buy... EVERYTHING! And the ones most worried about if their credit is good enough are the ones with the stellar credit. Always a good idea to have them apply asap.

It should be a real EYE OPENER that the "piddly" $17.00 was reported. Doesn't matter what the amount, if it's past the 'grace period' (typically 30 days after the bill is due) it's reported. Credit card companies don't report something until it's gone past the 30 days. They'll charge a late fee, but won't go through the trouble if it's in the grace period. After 30 days . . . it's reported. No matter how "piddly"

Reminds me of: "For want of a nail" . . .

Great post Gabs, you hit that topic out of the ball park!
Thank goodness, it is Friday,
Paul

Gabrielle--Can't help those who don't want to help themselves--Good Advice for anyone considering buying...Pay your bills!

Very good advice, Gabrielle. Sometimes, it's all in the details.

Owning a home is a privilege and must be earned by being financially responsible. Gabrielle, congrats on the feature.

oh yes its always the little things that count

As a credit restoration professional, I thought that I had heard all the excuses as to why they didn't pay that piddly $17.00 account. Lenders want see that you pay your bills on time. The very first question that I ask potential clients is, "are you current and are you able to stay current." The people that really get to me are the ones that need credit score help because they want to close on a home in 30 days, impossible, the bureaus won't respond for at least 30 to 45 days.

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If it's a payment obligation, care about it! Great blog posting!

Gabrielle: Great job explaining an all-too-common situation. It always helps to be sure to require your buyers to meet with the lender prior to meeting with you, or, better yet, at the same time you meet with them. That way, everyone can get everythign out in the open right away.

I would never take a non-preapproved client(with a credit check) out to view homes. I explain to a borrower they have an obligation so as to not waste a real estate agent's time and/or the potential homeowner's time.

Great example for first time buyers to read! I run across young buyers with the same attitude all the time..... "Well we didn't pay it for a couple of months, but then we sent in THREE payments at once".. they really have no idea that they are hurting their credit score by doing this. I'm reblogging this - you've said it all perfectly!

It's actually pretty sad that financial basics seems to have never been taught to youngsters in school, or at home.

Yes, it is so important to talk to a lender before looking at homes.

It never ceases to amaze me how people don't think it is important to pay their bills and that they can still get a mortgage.

Don't get the bills to begin with. The problem is not in I don't want to pay my bills, but in availability of junk credit that people think is real money in their pockets. So after 5 years of minimum payments on a $10 t-shirt, you didn't pay $10 but $25 or more. Financial education should start with percentages in interest first with everyone here. You didn't pay $25,000 for your car after 5 years financing, but $38,000. You didn't buy a home for $250,000 - after 30 years mortgage payments it over $460,000 if the rate is right. So on and so forth. Just a dose of reality.

But do you think that the banks are interested in that kind of education? I don't think so. First lure into credit card debt is always: "Imagine what you can have today with our credit card!"

So why bitching about payment delinquency if you proliferate it and issue consumer credit cards to people who can't do simple math.

Hi Gabrielle, I would bet most people don't pay close enough attention at their credit card statement. If you want your payment to be on-time then schedule with an on-line service, no worry about mail delivery and you can gurantee the payment. However, I noticed my mortgage payment took a little longer the the date I requested so you have to manage the time period and not run to close to due dates.

Good Information, thanks

Tom

I had a friend who wanted me to help her buy a house recently. She told me that she had decent credit so I put her in touch with a reputable lender I trust. The next thing I know I get a call from the lender saying she has never made a payment on time, on anything, ever! Roger that, guess she's going to keep renting for now. Maybe next time. LOL

Love your post, it is amazing what people don't think is important.

Credit is a class that should be taught in freshman high school and all the way through college as a required course.

Those small amounts are often seen as collection items stemming from some type of medical visit. People ignore them and doctors immediately turn them over to a collection agency. Now that $17 is ruining the credit scores which results in higher rates and a lot more interest paid over the life of the loan.

great post... right on target... people need to know these days everything is important to the lenders but especially history of on time payments of everything... thanks

Great Advice Gabrielle. Especially your point about not running out to make big purchases once you've been pre-approved. I agree with Andrew... this should be taught in school... before you're old enough to get credit!

Gabrielle,

Fantastic write! The one that gets my goat is "We didn't pay the $80 medical bill on the principle of the thing. The insurance was supposed to pay the whole thing, and that hospital..." I love to read your featured posts!

Mike in Tucson

JAN

2010

Gabrielle, I KNOW!!! And it works the same for landlords and tenants too...what are people thinking when they let things go to collections for $25 or $100!!! Consequences folks, consequences.

Fortunately ,gone are the days when some mortgage brokers would just respond with a ...don't worry about a piddly $17 late payment....I've got someone who will get this done for us,we do it all the time.

Thou est protest too much! The ones that always have the excuses are the worst offenders!

I am amazed at the homebuyers with bad credit, who think it's not their fault. It's always someone else's fault!

Gabrielle - I definitely think there are people in this world who should be required by law to take classes about finances. So many people live in the moment and don't think about the future.

If we could only all have the opportunity to teach this to all children before they start obtaining credit!

And I always have buyers sit down with a lender and go through their credit prior to showing them any homes because of this very reason...

I always get my buyers in front of a loan officer before we go too deep into the process. For everyone's sake this is the wise thing to do.

Some people you just can't save from themselves! Thinking a small dollar responsibility is nothing when you're asking to borrow a lot of money show a HUGE lack of understanding how the system works on the part of these people.

Pre-approve, pre-approve, pre-approve.

Oh yes, you can't be to careful about your credit. Good reminder for sure.

Thanks,

Patricia/Seacoast NH

Those are among the dumbest remarks I have ever heard from a would be buyer, and I have heard some doozies.

JAN

2010

As with anything....you either care or you don't care! and some people just don't get it!

JAN

2010

Gabrielle - I haven't been here for awhile and just noticed your new picture....GORGEOUS!

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Gabrielle Kamahele Rhind, Broker/Owner

Tucson, AZ

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KGC Properties LLC, Tucson Property Management & Real Estate

Address: PO Box 18621, Tucson, AZ, 85731

Office Phone: (520) 245-0242

Cell Phone: (520) 245-0242

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