It's amazing how the tables have turned. I remember the day, not so long ago, when if you could fog a mirror, you could get a home loan. Today getting a good rate on a home loan is like plugging the BP spill, nearly impossible unless you have impeccable credit. You'd be surprised at how many people I come in contact who've had perfect credit squashed merely because of a change in their credit due to the reporting agencies new guidelines.
Let's just say you're a first time home buyer and you go through the typical process (today) of obtaining a loan. A look at your credit history in today's climate will be much different. Yesterday you could have a few open lines of credit (not a lot, but a credit card or two). Fast forward to today and BAM! Your credit card that you pay in full every month has decided to cut your credit line in half. Deduct 20 points.
Over 25.5 million people now have a credit score of 599 or below. When representing a buyer or seller always discuss credit scores. Every seller in my portfolio is a short sale case with one step closer to foreclosure. Each one of my sellers had no idea that allowing their property to go to foreclosure could lower their score by 150-200 points not to mention the future damage that is caused by a lower FICO score.
The average consumer doesn't realize that when their FICO score is lowered, it doesn't just affect their ability to purchase. Insurance premiums go up, future employers check credit scores to help decide in the hiring process and it can take years to raise a score.
If you find that your buyer or seller needs help in healing their credit history, hire a reputable agency. Sometimes a few phone calls will do the job and it can mean the difference in how much credit and what percentage rates your buyer qualifies for. Trust me, it's worth your effort and your buyer's commitment to you as an industry expert.
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