Why Are My Credit Scores Different??

April 24, 2012 By 6 Comments

fico

We often talk to folks who are ready to buy a house, and they have the credit scores that they get for free every year.  Well, those scores are not the same as the scores you get for a mortgage credit report.  In fact OUR Credit Score numbers and the ones they send you, are almost always DIFFERENT!

Okay- so by now you know that you will have 3 credit scores – at least this is what we’re working towards – and we want scores that are over 700.

But since the credit scores are for the SAME person… you might think (logically) they would be the SAME.  Right?  I’ve NEVER seen 3 scores that were the same – and I’m old as dirt and I’ve seen a TON of stuff! [Read more...]

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You Can’t Compare Rent Payments to House Payments

February 8, 2012 By 7 Comments

buying a foreclosed home in ncBuy a House, Get a Raise! I’ve told people this for years, and they don’t always understand.  You see, when you purchase a house, it gives you a tax incentive, and so if you are paying $1200 a month for a mortgage payment you are likely writing off at least $400 a month in interest and taxes!

So a house / mortgage payment of $1200 does not compare with a rental payment of the same thing!  Buying a house can be an emotional experience,  but there are benefits to homeownership too!

There are some GENUINE Deals out there when it comes to purchasing foreclosed property- HUD has a program that only requires $100 downpayment!  There are special First Time Home Buyer Programs too!

In addition to that – Did you know that rental history is not adding anything to your credit score??? Home-ownership does?

In general, your landlord does not report to the credit bureau unless you’ve screwed something up!  A mortgage company, reports an on time, monthly installment debt.  This can be a HUGE lift to your credit score!  8o))Just one more reason to call us about purchasing a home in NC!  Steve and Eleanor Thorne, Mortgage Banker  at 919-649-5058.

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I Have A Repo on My Credit Report Can I Buy a House?

February 6, 2012 By 5 Comments

Villages of ApexI’ve had several of these questions lately, and I figured I’d let you know what I’m seeing.

Just because you have a repossession on your credit report does not mean that you have to delay in purchasing a home… but that doen’t mean it’s not a problem.

Okay, so let’s say you have a repossession from 2005.  Next year, 2013, the issue is going to “age” off of your account.  That means, no matter what the creditors are telling you, it’s going to go away – COMPLETELY away.  So, in most cases I don’t recommend that folks shell out $4000 to settle the deficiency balance this year (when it’s going to age off next year) because then it’s going to stay on your account for another 7 years! (To find out how long items stay on your credit report, click here!) [Read more...]

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Does The Balance On Your Account Matter?

February 4, 2012 By Leave a Comment

new home sales apexI recently read a report that said:

“Several of my clients are in the credit restoration business and a recent conference call with some of the heavy hitters in the business revealed an astonishing new update to how the FICO score is computed.

Balance management – that is the practice of getting the “balance to available credit” (similar to ltv) below 50% and ultimately to below 30% for maximum benefit, “NO LONGER appears to improve the score” was the quote on the conference call. It was a common, and very simple way to get a few point increase in FICO score was to transfer balances accross cards, or pay down across cards to get the balances below 50 and 30% of the available credit line. Another common practice if there was no room on other cards or no cash to pay balances down was to call the credit companies and request an increase in the available credit limit – which would result in an improved ratio and a better score. It appears this is NO LONGER the case.”

In review of our recent files… we do not feel this is accurate information.  Our files show that folks who pay their accounts down to at lest a 50% level do have an improvement in their scores.

Don’t be fooled by those who don’t have many clients, are not working full time in the business, and just plain don’t know…  Steve Thorne at Mortgage Banker in Cary 919 649 5058  if you want to buy a house and need more information!

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What’s In Your Wallet (It Makes a Difference) Part 2

February 3, 2012 By 1 Comment

Fix Your CreditWorking on your credit scores so you can purchase a home?

If you are not behind on payments, and you think you can manage the payments as they are (without closing accounts)… let’s talk about one of the most important things you can do to raise your credit score.

Take out your wallet… Look at the Credit Cards; and find the ones that have the name of a STORE on them (these are just examples): [Read more...]

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What’s In Your Wallet (it makes a Difference)? Part 1

February 2, 2012 By Leave a Comment

new homes raleighAre you considering a Home Purchase???  Many of us realize that credit scores are the Holy Grail—the one thing you do not want to screw up… and if you have, it’s the one thing you want to figure out how to FIX… FAST!

We talk to people all the time who have been laid off, or had an accident, or got sick, or relocated and then hit hard times. The first thing you need to do is GET OVER IT! Get past the anger and the sleepless nights trying to juggle everything, and start making a plan.

All too often people could increase scores and save years of problems if they asked for help EARLIER. We recommend talking to a Consumer Credit Counseling Service (NON PROFIT) before you get behind on bills. They can get credit card rates lowered, past due and over limit fees dropped, and your total monthly payments manageable. Once you’ve made 9 payments into these Services, you will probably see a positive difference in your Credit Score!

Again—you want to make sure to talk to NON-Profit Consumer Credit Counselors. They will typically keep only a very small fee for distributing the payments.

Are you trying to improve your score so you can purchase a home?? Contact Steve and Eleanor Thorne at Mortgage Banker in Cary , Cary, NC  919-649-5058

 

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Credit Score Basics – For First Time Homebuyers

January 31, 2012 By Leave a Comment

We were able to ask Ken Venable with CREDCO about FICO Scores and what the fallacies and models used today. We are hoping to clear the air – because there’s so much information available now… and some of it is just plain misleading.

For instance the “Free Credit Score.com” jingle that folks listen to, and then PAY for doesn’t have a matrix that is anywhere close to the “Mortgage” matrix we must use to score you! We’ve seen many people who thought their credit score was “up” to 640 – when we pulled it and found that the score was actually 618, the customer thought we were crazy!  We weren’t… there’s just a difference between a Mortgage Report Score, A Medical Credit Score, and a Retail Credit Score.

Each credit bureau uses a “Score Logic” that is slightly different from one agency to another. Meaning that if 4 different people pull your credit, you might get a slightly different score – especially if the person pulling your credit doesn’t note that you are a junior… or if they have the wrong zip code!  That’s right, entering the wrong street address can change your score, slightly.

A credit report is just a snapshot in time… think about someone taking a picture of you in one day.  Well, they might get a picture of you at Starbucks, at your desk, in a meeting – you move during your day. Creditors can submit information to the Bureaus on any given day at any given time – so the snapshot (or pull of your credit) on a given day by different people might have slightly different scores.  It doesn’t happen often – but it can happen. [Read more...]

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Closing a Credit Card??

January 19, 2012 By Leave a Comment

credit cardsIf your trying to decide what to do with all that cash Washington is sending you in the next few weeks… you might also be looking at your credit report to see how to use that money more effectively.

In today’s environment we don’t usually suggest that folks close credit cards with no balance, but if that’s a decision you’ve made, here are some tips on how to close them the “right way:”

Contact Customer Service – The number should be on the back of your card.  Tell the representative that you are closing the account.  It’s their job to try and get you to keep it open, but if you’ve decided this is the right course, stay firm with them.  Make a note of who you speak with, the date and time (I normally write this on my bill).

Follow up in writing – be sure to include the information about who you spoke with, and request that your credit be updated to show that the account was closed at your request.  Ask for a reply in writing for your records.  We suggest that you send this letter certified return receipt requested.

Recheck your credit report 60 days later.  The changes should be reflected.

If you are considering a home purchase, and you have credit scores that are ALMOST there, but not quite… call us!  Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.

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What To Dispute On Your Credit Report

January 18, 2012 By Leave a Comment

 

If You’re Huntin’ A Better Credit Score – Let Sleepin’ Dawgs Lie!

don't dispute everythingIf you are looking for a new home, you are probably aware that your Credit Score is a CRITICAL item in determining your interest rate and possibly how much house you can buy / qualify for!

We talk to people every week who receive a copy of their credit report, see some derogatory remarks from 2005 and immediately start writing dispute letters.

This might not be your best strategy (each case is different of course), because the credit score is really an indication of what you are about to do.  It tries to PREDICT what your credit behavior is going to be based upon RECENT activity.

So what happened 3 years ago, is not really as important as what happened 18 months ago!  If it is a MEDICAL COLLECTION – there’s a possibility it won’t have to be paid… most judgments and liens will have to be cleared before you can get a mortgage.

If you are considering a purchase, and want to know more about your particular credit report and circumstances, to get pre-qualified…  call Steve and Eleanor Thorne, Mortgage Banker in Cary, 919-649-5058

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Credit BooBoos Stay Around A While

August 14, 2011 By Leave a Comment

poor creditDoes your credit look like a train wreck?  I’ve talked to several clients recently who hit a rough spot – and are working their way out.  They had some questions I thought other people might need answered too!

How long does negative information stay on a credit report?

The Fair Credit Reporting Act says that negative information can stay on your report for a minimum of seven years (I always thought that said MAXIMUM – but I was wrong).  There are some exceptions to this:

* Delinquency information like late payments remain for seven years from the DATE OF DELINQUENCY.  This is especially tricky if you have collections that are being sold from one account to the other.  Because the Collection companies are re-filing these delinquencies as if they are brand new offenses!

* Charge-offs stay for seven years PLUS 180 days from the date reported to the credit bureau.

* Student loan defaults report for seven years.

* Foreclosures stay on your report for seven years. The seven year rule also applies to Law suits, judgments and paid tax liens.

* Bankruptcy stays for 10 years from the date you file.*

* UNPAID TAXES stay on your report for 15 years!  Ouch!

If you have questions about USDA Home Loans, or about using FHA or VA Home loans to purchase a home in NC – please call Steve and Eleanor Thorne, USDA Home Loan Experts in NC 919-649-5058  

 

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