ALLOWING MULTIPLE LENDERS TO PULL YOUR CREDIT REPORT LOWERS YOUR SCORE
Many of us shop on the internet for the best deal on a mortgage. Most of us are not aware that if we go on the internet and allow the website that we visit permission to pull our credit with up to 4 lenders competing for your business that each time a new lender pulls your credit, your scores drop. This occurs if the lenders pull your scores more than 14 days apart. The intelligent way to pull your credit report is to do it yourself and then give the score to the lender. You can go to AnnualCreditReport.com and pull a copy of your credit history for free once a year for each of the three credit reporting companies. You can then pay around $7 for a copy of an Equifax credit score, which is the one closest to what mortgage lenders use. The free reports list all the debts, the correct and possibly incorrect credit report data but you do have to pay extra to receive a credit score.
Too many consumers are confronted with incorrect information on their credit reports. Each incorrect piece of information can lower your score. If you needed a 680 to receive a 6%, 30 year fixed rate mortgage on a $300,000 mortgage but your score was 676 because of incorrect information, you would be either turned down for the loan or pay a higher rate. If the higher rate was one percent higher then you would pay an extra $197.26 penalty per month on a thirty year fixed rate mortgage. If you kept the loan for the entire 30 years you would pay an extra $71,013.60 than you would have if you had corrected the incorrect information before applying for the mortgage.
The time to fix your credit report is 2-6 months before you need a mortgage. All consumers should look at their credit reports at least once every six months. My buyers are all required to get their free credit reports before I will even put them in my car to look at homes. The most important thing that I can do for my buyers is to assist and guide them into getting their credit scores as high as possible before applying for a mortgage.
There is one very simple technique that will help your scores jump as much as 50 points by simply following my advice on the intelligent handling of credit card debt. Send me an email and I will show you how!
Please feel free to contact Jim Thornton by email for all your real estate and mortgage questions.
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