Your credit score doesn't mean a whole heck of a lot.
Yeah...you heard right. Your credit score doesn't mean bubkus if it's below 660. The s
core is not just a number; it's a history of how you run your fiscal life. At one point or another, everyone gets into some financial hardships. The true test is how you conducted yourself afterwards.
If your credit score is on the low end of the acceptable spectrum, underwriters want to know why. Was there a death of a wage earner, was there an illness in the family? Was there a catastrophic event beyond your control that prevented you from paying your bills on time (I didn't get the statement on time don't cut it)? In other words was there something that happened in your life that affected your ability to your bills?
Underwriters look at the time frame of the late or nonpayment events to determine if it was an isolated situation or is it a recurring pattern. They understand that bad things happen to good people, but have little tolerance for repeat offenders.
If your credit score is...let's say 635 you're thinking you're ok its well above the 600 minimum. Not so fast, because the underwriter is going to rip that credit report to shreds looking for reasons to deny it. Not because they're mean or nasty, it's because their job is on the line.
Underwriters get graded on their default rate. Each mortgage they approve that winds up being habitually late or (worse) foreclosed on is a black mark against them. Too many black marks and their out of a job and very likely out of the underwriting profession completely.
The moral of this story is to keep your nose clean after a bad situation is resolved. Go out of your way to make sure the bills are paid on time every month, especially the rent or mortgage. If you'
ve gone through a bankruptcy and pay your bills late afterward, you are toast because what the underwriter is thinking is you don't care and this will be your pattern. Why should they lend to someone who is habitually late? Why should they stick their necks out for you?
You have to give them a solid reason. The reason is proof that you changed your ways or it was an isolated situation beyond your control and you are paying all your bills on time. Promising to be good from now on works if you're a child, but does not work with an underwriter.
If you are not sure where you stand, or how to improve your situation drop me a line and I will review your particular situation and guide you through the credit score maze. By the way, I don't charge for the service.
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