Want to buy a new home in NC? We have some great news! IN 2013 – minimum credit scores required for a mortgage are going down, in many cases. We now need a minimum of 640 to qualify someone through the Automated Approval Systems, however we can get folks with scores down to 620 qualified for a USDA Home Loan, and often times we can go below that for a FHA Home Loan in NC.
If you are working on your credit scores, so that you can buy a house, you might be looking at what you should dispute, and what accounts you should close, or pay off. We have some thoughts about all of that, based on the hundreds of credit scores we look at each month – and the people we’ve been able to actually help get their mortgage credit scores higher so that they can buy a house!
If You’re Huntin’ A Better Credit Score – Let Sleepin’ Dawgs Lie!
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.
Because your credit report is a snapshot of your credit at a particular moment in time, new information is constantly flowing to your unique report. Literally every credit action you take to apply for credit, make a payment, change your address, or an inquiry from a prospective creditor will impact your score.
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.
Things that COULD hurt your credit scores? Disputing all of the items on your credit report!
The current Urban “myth” is that you can simply dispute items on your credit report – and they will have to take them off – is just that, a Myth. Now, if you have LEGITIMATE incorrect information – then sure, your should dispute that information. But just disputing everything on your credit report to try and get a higher score isn’t going to do you much good. That’s where the let sleeping dawgs lie comes in!
You also need to look at the difference between a charge off and a collection account.
“Charge Off” means that the institution that loaned you money is virtually “saying Uncle” and giving up on you ever paying the money back. They take it as a tax write off (loss) and move on. ”Cost of doing business…” Does that mean you’re off the hook? Nope.
Many people mistakenly think when a debt has been charged-off that it’s been cancelled by the creditor. This is not true. Often times, those accounts are turned over to a Collection Agency. We know which of these accounts are actually hurting your credit score. Bottom line? Call us!
If you are considering a purchase, and want to know more about your particular credit score and circumstances, to get pre-qualified… call Steve and Eleanor Thorne, Mortgage Loan officer in Cary, 919-649-5058 Connect with us on Google Plus or via Facebook to keep up to date on any changes to the minimum credit score requirements in NC!