Credit reports are generated by 3 credit agencies (Experian, Equifax, and Transunion). Each uses a different formula. The greater the number, the less risky you are to creditors. Specific items can have a detrimental impact on your score and may potentially cause you to get denied for a loan. The following are tips for potential Bennington home buyers on credit issues that impact the ability to get a loan.
Credit Issues That Impact The Ability To Get A Loan
Missing payments demonstrate poor credit behavior and consequently drop your ranking. The extent to which you are late (30, 60, or 90+ days) and the number of missed payments also play a role. Late payments remain on your credit profile for a very long time.
Accounts In Collections
If you are really behind on payments and a loan provider has exhausted their own procedures to retrieve payments from you, they will likely transfer your account to a collection agency. This is included in your credit profile. The information will stay on your credit profile even if you pay off the debt.
If a creditor is unable to collect the full amount due to them, they may “charge-off” the uncollected amount. This could happen if you entirely neglect to pay or if you settle for a lower amount. Charge-offs appear on your credit file for 7 years. Future lenders will view this item and assess how likely you are to repeat this behavior.
Items of Public Record
Bankruptcy, liens, judgments, foreclosures, and other similar matters are a matter of public record. Even when you pay off these items, the initial submission will remain in your credit report. Particular things remain for up to 10 years whereas others (i.e. liens) never disappear. Obviously, it is critical not to let matters get this far.
Tips For Potential Bennington Home Buyers
All of the credit issues that impact the ability to get a loan detailed above make you a high-risk borrower and will either lead to higher loan rates or completely prevent you from getting approved for a mortgage. Demonstrate good payment patterns and it will save time, money, and heartache when it comes to buying a home. These are the best tips for potential Bennington home buyers. Remember that this covers only a few common credit issues. Speak with a financial advisor for advice on your specific situation.