Credit In Mortgage Process: Credit Scores Versus Credit Report

This BLOG On Credit In Mortgage Process: Credit Scores Versus Credit Report Was UPDATED On July 24, 2017

Credit In Mortgage Process is probably one of the most important factors when it comes to residential home mortgages.  There are two ways mortgage lenders view credit:

  • Borrowers need to meet minimum credit score requirements
  • Mortgage Lenders will review the overall payment history listed on credit report
  • Special emphasis will be placed on payment history for past 12 months
  • Special emphasis will be placed on late payments after bankruptcy, deed in lieu of foreclosure, foreclosure, short sale.

Credit Scores Versus Credit Report

  • Mortgage Loan Applicant’s  credit scores is what decides whether they qualify for a mortgage loan.
  • Credit Scores is also what determine rates and terms.  
  • There are pricing adjustments on mortgage interest rates depending on the borrower’s credit scores.
  • Also,  debt to income ratio will be restricted to 43% debt to income ratio versus 46.9% front end DTI and 56.9% DTI if credit scores are below 620 FICO with FHA Loans. 
  • Borrowers with credit scores 620 FICO or higher,  debt to income ratio limit increases to 46.9%/56.9%. 
  • Having a clean credit report and maximizing credit scores is the most important factor when it comes to qualifying for a mortgage loan. 
  • Most home buyers who consult mortgage brokers are told that they need to repair their credit first before the mortgage broker will be able to help them. 
  • People need to educated themselves about credit, credit repair, credit scores, rebuilding credit, and credit reporting agencies.

We highly recommend that you visit Credit Fix Advisors and check out what will be the largest most informative credit repair website.  It has just launched and work is in progress but it will explain all about credit and the importance of credit repair and rebuilding your credit.

Disputing Credit During Mortgage Process

Borrowers with bad credit can hire a credit repair company or repair credit on their own. One important note mortgage borrowers need to realize is that they cannot have credit disputes during mortgage process. There are exemptions on credit disputes.

  • Medical Credit Disputes are exempt
  • Non-Medical Disputes with over $1,000 in disputes needs to be retracted or downgraded to manual underwriting
  • Non-Medical Collections with zero balances are exempt from disputes
  • Charge Offs cannot have credit disputes

For more informational articles on credit repair and the importance of credit during mortgage process, visit  Credit Fix Advisors.

  • Credit Fix Advisors is a credit and mortgage informational site where consumers can get free information on re-building credit to qualify for mortgages.
  • There are blogs that will explain on how to repair own credit. 
  • Become a member on Credit Fix Advisors credit Forum and ask any credit or mortgage related questions.

Secured Credit Cards

The best way to re-establish credit after a bankruptcy or foreclosure is by getting secured credit cards.

  • Secured credit cards is the easiest and fastest way to increase credit scores and start re-establishing credit. 
  • The ideal amount of secured credit cards to get is 3 with at least $500 credit limit.
  • Depending on how bad the credit report is, each secured credit card can increase credit scores by 20 or more points. 
  • Consumers can get secured credit cards that report to all three major credit reporting agencies  .

Potential home buyers who have the income but do not meet the credit in mortgage process and need help in qualifying for home loan, please contact Gustan Cho at 1-800-900-8569 or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

Related> Co-Signing

Related> Minimum Credit Scores For A Home Loan

Related> Mortgage Rates And Credit Scores

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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