A major part of the job of a mortgage professional, in my opinion, is helping customers get their credit cleaned up in anticipation of becoming qualified buyers. In today's market, lenders have become increasingly tighter, scrutinizing any potential credit issues in an effort to ward off the possibility of foreclosure.
However accurate or inaccurate it might be, credit scores are used as a predictor for the possibility of a consumer going 30/60/90 days late on their potential home purchase, all the way up to "predicting" the possibility of foreclosure. Therefore, it is of utmost importance to not only know what is in your report, but as well, how to rectify the negative results you might find.
In beginning the process of purchasing or refinancing your home, it is important to do your "homework" first. When a consumer comes to me looking to become pre-approved for a home loan, I believe in not only taking the basic application information, but getting an income verification (recent paycheck stub), and completing an interview surrounding the consumer's financing history. This allows me knowledge of how well you are self-aware regarding your personal finances, and how open you are in regards to allowing help in getting issues resolved. At that point, I will initiate a basic tri-merge credit pull, and review the report line-by line with you in an effort to ensure accuracy of the report. From there, you and I will work together to create a "plan of action", and I will give guidance in an appropriate manner in order to help work out any credit glitches that may stand in the way of getting financed. We will develop a reasonable time-line in order to get things worked out, and stay in touch periodically, based on the severity of the credit issues.
There are a few ways of dealing with credit repair. There are credit repair specialists who will review your credit, write the letters, and send to the various bureaus and creditors. These specialists can cost anywhere from $99 per item repaired to a $500 flat rate for all three bureau clean-ups, and higher depending on what they need to do. There are reputable, as well as disreputable credit clean-up services, as in all industries, and should you take this route, it would be in your best interests to contact a mortgage professional who has dealt with credit repair issues to ensure the reliability of the credit repair specialist used. These services can be valuable, as it can be a daunting task to undertake your credit clean-up in your own hands; it can be a timely endeavor, and less effective should you not know exactly what to write or what steps to take.
Should you wish to tackle the credit clean-up yourself, I will walk you through the steps of filing dispute letters, to whom, and how to best document your efforts. As stated before, this can be a timely endeavor, and if there are extensive issues, it would be advised to bring to the hands of a credit repair specialist.
After our clean-up efforts are completed, and documentation has been received from the bureaus verifying resolution, we will sit down for a post clean-up interview, review areas of the credit report that are still present, review "personal" work that has been completed (ie. paying credit cards below 30% of maximum), and repull the tri-merge credit report. This generally takes place 45 days following the initiating of the credit clean-up, as creditors have 30 days to respond to disputes, and bureaus need time to rescore the credit. This time-line is, of course, dependant on the type of clean-up being performed.
Once your credit is under control, we will move forward with getting you pre-approved!
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Great post Bo!! Having someone to help you get the score up these days to qualify is awesome. It was great meeting with you yesterday. You should have came to the board luncheon, we played bingo for a spell to raise money for RPAC. It was fun!!