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| Kelstar Financial of Alaska, Inc. |
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| Proudly Supporting Our Military Troops And Veterans |
| "As a former member of the Armed Forces, I know first hand the needs of our Military and Veterans." ~Cris Skinner~ |
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| Mortgages and Credit Reports Many home buyers are worried about how their credit report will affect their ability to buy a home. Credit standing has a significant impact on a homebuyer, but does not necessarily disqualify them from purchasing a home. However, it could have an impact on the type of mortgage program and interest rates a homebuyer may qualify for. Most people will not need to worry about the effects of their credit history during the mortgage process. However, you can be better prepared if you get a copy of your credit report to review before you apply for your mortgage. That way, if there are any errors, you can take steps to correct them before you make your application. If you have had any credit problems, be prepared to discuss them honestly with a mortgage professional and come to your application meeting with a written explanation. Responsible mortgage professionals know there can be legitamate reasons for credit problems, such as unemployment, illness or other financial difficulties. If you had a problem that's been corrected, and your payments have been on time for a year or more, your credit may be considered satisfactory. ABC's of Mortgage Credit The mortgage industry tends to create its own language and credit rating is no exception. BC Mortgage lending gets its name from the grading of one's credit based on such things such as payment history, amount of debt payments, bankruptcies, equity position, credit scores, etc. *Other Things Being Equal-When you have derogatory credit, all of the other aspects of the loan need to be in order. Equity, stability, income, documentation, assets, etc. play a larger role in the approval decision. *Worst Case Scenario-When determining your grade, various combinations are allowed, but the worst case will push your grade to a lower credit guide. Mortgage Lates and Bankruptcies are the most important. *Going Once, Going Twice-Credit patterns are very important. A high number of recent inquiries and more than a few outstanding loans may signal a problem. A "willingness to pay" is important, thus late payments in the same time period is better than random lates, as they signal an effort to pay even after falling behind. How to Correct Errors You have the right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information in your credit file. When a credit reporting agency receives a dispute, it must reinvestigate and record the current status of the disputed items within a "reasonable period of time," unless it believes the dispute is "frivolous or irrelevant." If the credit reporting agency cannot verify a disputed item, it must delete it. If your report contains erroneous information, the credit reporting agency must correct it. If an item is incomplete, the credit reporting agency must complete it. For example, if your file showed that you were late in making payments on accounts, but failed to show that you were no longer delinquent, the credit reporting agency must show that your payments are now current. Or if your file showed an account that belongs only to another person, the credit reporting agency would have to delete it. Also, at your request, the credit reporting agency must send a notice of corrections to any report recipient who has checked your file in the past six months. For those items in your credit profile which you feel deserve further explanation (such as an account that was paid late due to the loss of a job, military call-up, or unexpected bills), you may send a brief statement to the appropriate credit reporting agency. The information will be placed on your credit profile and will be disclosed each time your credit profile is accessed. Credit Reporting Agencies Equifax PO BOX 740341 Atlanta, GA 30374 (800) 685-1111 Experian 701 Experian Parkway PO BOX 2002 Allen, TX 75013 Consumer Credit Questions 888 EXPERIAN (888 397 3742) Transunion PO BOX 4000 Chester, PA 19016 (866) 887-2673 |
| Credit Facts |