Credit Reports - Home Buyers in Pooler

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Real Estate

Are you looking to buy a first home in Pooler, Bloomingdale, or Rincon, GA?  Or even refinance? The first and most important step is to be fully aware of your credit score. Mortgage loan approval is based on your credit scores and naturally you want to get the most favorable lending rates available to you. There are a lot of myths and mysteries when it comes to credit scores, so I’m including some information that will help you be prepared.

1. “Opting out” of consumer lists sold to third parties will help a credit score. No it won’t. The bureaus don’t know if someone has opted out or not and it’s not factored into the credit scores. If someone’s score improves after they have opted out it’s because something else has changed on the report, not because they opted out.

2. Paying off old delinquencies will remove them from your credit report.  Unfortunately, a collection account or an account with late payments will stay on a credit report for 7 years whether or not you have paid it off. Occasionally credit bureaus will go in and remove old collections—but that’s an internal decision. Also, when you  pay off an older collection it will bring the reporting date current, which could actually hurt your credit score.

3. All rate shopping inquiries are the same. Nope! Applying for a car and a mortgage is not the same thing. You as a consumer can shop your mortgage rates, but the car inquiry will be considered a hit to the credit. The same is true when you apply for a credit card or similar. The lender will look at your inquiries and if the inquiries are not the same, they will ask for explanation of the credit inquiry. They are able to determine if the inquiry is a bank pulling the credit for a mortgage, and if so those pulls will be lumped to together and removed from your credit history.

4. Opening new accounts will help your credit score.  This helps only if the borrower has no established credit yet. If you already have a credit score, i.e., prior loans or credit cards, opening a new account will actually have a negative effect on a credit score until substantial history is accumulated on the account.

5. Paying off all your revolving balances is a good thing!  Not exactly. Having no revolving balances can also negatively impact your credit score! The credit bureaus like to see at least one revolving balance, even if it’s small. This demonstrates an ongoing level of responsibility. So always keeping one account with a small balance is a very good idea; consider using one credit card strictly for, say, groceries or utility bills. You’ve already budgeted for them, so you can pay them off and still maintain a small revolving balance.

6. Your credit is affected by how much money you have in your savings or checking accounts. This is a myth.

7. Closing old accounts will help a credit score. This would seem like a good idea, but in reality when you close the account you lose the history. If it’s an account you’ve had for a long time and had no late payments, you want that to be reflected in your credit score. The credit scoring models like to see several open accounts that have zero balances and are not used often.  Again, you’re trying to show that you are financially responsible and will be able to pay your mortgage in a timely fashion.

8.  When I check my own credit score it’s the same one used by lenders. This gets a little bit crazy, but a person actually has 69+ different credit scores. The ones that lenders use are completely different than what you see when you get your scores. Those are personal scores and are not used by any industry for any reason.

9. Checking my own credit report will hurt my score. Since it isn’t the same score used by lenders, it’s what is called a “soft inquiry”  and won’t impact the scores. Only “hard” inquiries done by creditors when a you apply for a loan or credit card can possibly have a negative affect on a credit score.
 

One of the most important things you can do is to know your credit history. The Fair Reporting Credit Act (FCRA) makes that possible for you. The act gives you an opportunity to pull your credit report from each Credit Bureau (there are three) once per year, so you can review each report and identify any credit issues you need to resolve. While there are many free sites available, they usually only offer a report from one credit bureau and not the full picture. At the end of the day, they are trying to get you to PAY for those extra services—and not all creditors report to all 3 bureaus, so you do need all 3 to be fully prepared. The best decision is for you to pull your 3 reports annually—again, *FOR FREE* under the FCRA--and review any negative items on the report.

 Local Lenders Serving Pooler, Bloomingdale, Rincon, Guyton, Savannah, Pembroke and surrounding Coastal Georgia region : 

Carla Estep  : Bank South Mortgage 

912-572-46014 | ClosewithCarla.com

 

Chriss Allen  : Savannah River Mortgage

 912-826-4600 |SavannahRiverMortgage.com

 

Debbie Marcoux : Movement Mortgage (Not local but licensed in GA)

844-935-3634 | Mortgagemomradio.com

 

Pooler | Bloomingdale | Ellabell | Pembroke | Guyton| Rincon | Richmond Hill | Springfield | Port Wentworth | Savannah | Richmond Hill

Chatham County | Bryan County | Effingham County

Coastal Georgia Real Estate and Rental Homes

Proudly Serving : Fort Stewart and Hunter Army Airfield (HAAF)

Michelle M Tucker | !Daley Real Estate | GA Real Estate License #297541