Credit Marks That Affect Home Loan Approval

Do you know what information lurks in the depth of your credit report? It’s not a trivial question if you are in quest of a mortgage loan. The following detailed consumer and credit information appears in your file:

• Consumer Name

• Address

• Social Security Number

• Birth date

• Employer(s)

• Credit accounts

• Loans

• Credit card(s)

• Court records

• Bankruptcies

• Tax liens

• Monetary judgments

In addition to the above listed information contained in credit reports, credit ‘inquiries” are also detailed in the report. In other words, anytime a consumer applies new credit in the way of financing or a loan, the information is added to the credit report. Potential lenders will evaluate multiple current and recent inquiries on a consumer’s credit report. Generally, most inquiries remain on a credit report for up to two years.

Moreover, most credit information will stay on a credit report for seven years while a bankruptcy will remain for ten years or during the a consumer is looking for a mortgage loan.

In the United States, federal law regulates how the information contained in credit report is be used and by whom. Hence, individual consumers have the right to request a copy of their report. On the other side of the spectrum, lending institutions and businesses are required to meet certain criteria. Prior to accessing a consumer’s personal information, a prospective creditor must follow the requirements detailed below:

• Up-to-date business certification or licensing

• Proof of a permitted purpose under federal law

• An on-site inspection of the business

• A signed documentation authorizing the business to utilize the data appropriately

Importantly, according to the Fair Credit Reporting Act (FCRA), consumers are allowed to a free credit report. The entitlement is permitted within 60 days of a consumer being denied credit, employment rejection, insurance denial, or turned down in rental approval. Moreover, unemployed consumers or recipients of public assistance are entitled to a free report once a year. Additionally, if a consumer has reason to believe that their credit file contains inaccuracies as the result of fraud, they have the right to request a copy of their credit file.

For the consumer who is employed and has not been exposed to identity theft, a fee is required to obtain a copy of their credit report. As creditors use all three bureaus to verify credit, the consumer should obtain a report from all three agencies: Equifax, Trans Union (TRW), and Experian.

Alternatively, credit reports are not strangers to errors, mistake or inaccuracies. When inaccurate information is contained in a credit report, it can taint the credit-ability of a consumer. As a result, consumers have the right to dispute inaccurate information. Once the information is investigated and verified by the credit bureau, the consumer can request the invalid information be removed.