How To Review Credit Report For Errors Prior To Mortgage Process

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This ARTICLE On How To Review Credit Report For Errors Prior To Mortgage Process Was PUBLISHED On August 1st, 2020

How To Review Credit Report for errors prior to applying for a mortgage:
  • Homebuyers should always check and review their credit reports prior to applying for a mortgage
  • Make sure you check and review your credit reports months before you apply for a home loan
  • Errors on credit reports cannot be fixed overnight
  • It takes time to correct errors
  • Errors on credit reports are common
  • There are instances where credit bureaus do not report positive credit
  • By positive credit not being reported on the three credit reports, consumers are being cheated on high credit scores and aged credit tradelines
  • This error is common
  • Do not hire a credit repair company
  • Credit repair is not necessary to fix your credit to qualify for a mortgage
  • We will explain on How To Review Credit Report and checking for error in this article
  • The team at Gustan Cho Associates are experts in helping our borrowers fix errors on credit report
  • The team at GCA Mortgage Group can also help borrowers maximize their credit scores so borrowers can get the lowest available mortgage rates

In this article, we will discuss and cover How To Review Credit Report For Errors Prior To Mortgage Process.

Understanding How To Review Credit Report For Errors

How to view your credit report for errors

Understanding How To Review Credit Report For Errors Prior To Mortgage Process is important.

  • Reading and understanding credit reports are easier than it looks
  • Credit scores are calculated by the data and information on your credit reports
  • Credit scores are one of the main important factors used by lenders and creditors to make a credit decision
  • Your credit report contains all of the creditors you have and your payment history
  • Consumers should know and understand all the data that is on their credit reports
  • Under the Fair Credit Reporting Act, every consumer is entitled to one free credit report from each of the three major credit bureaus—Equifax®, Experian®, and TransUnion®—annually

One of the key factors lenders and creditors pay close attention to credit reports is the payment history. A person’s payment history is indicative of the future payment history on a new credit tradeline.

Information Listed On Consumer Credit Reports

There are four sections comprised on a consumer credit report. Each section should be carefully reviewed by consumers for accuracy and errors. Errors are common on consumer credit reports and can affect your credit scores and overall creditworthiness.

Here are the following data and information that is listed on consumer credit reports:

Consumer personal information:

  • The personal information of the person in question is listed in the first section of a credit report
  • The credit report will state the consumer’s name, date of birth, social security number, current and previous addresses, and employment information
  • The personal data information is not used to calculate credit scores
  • It is listed for the purpose of verifying the identity of the consumer
  • If there are errors on this section, notify each of the three credit bureaus and dispute the inaccuracies

Credit Account Information And Data:

  • The second section of each credit bureau contains credit tradelines and payment history
  • All active and closed accounts are listed in this section
  • The type of accounts is classified such as a revolving credit account, student loans, installment loans, auto loans, personal loans
  • The credit bureaus will list the accounts as opens, closed, delinquent, collections, charged-off
  • The credit bureaus need to delete any derogatory credit tradelines off the credit report seven years after the date of the last activity
  • This date will be listed on credit reports
  • The payment history of each credit tradelines is reported
  • Any 30-day, 60-day, 90-day, 120-day late payments will be posted
  • The date the account was opened will be listed as well as the date of the last activity (DLA)
  • The longer the payment history on a credit tradeline the stronger the consumer credit profile
  • The maximum credit limit and the outstanding balance is posted
  • The lower the credit utilization ratio, the higher the consumer credit scores
  • For maximum credit score optimization, consumers should have less than 10% credit utilization ratio

Public Records:

  • Public records are court records that is available to the public
  • Judgments, tax liens, bankruptcies, foreclosure, short sale, collections, charged-off accounts are all public records that will report on credit reports
  • There are instances where consumers still have an active public record that does not report on credit reports
  • This is important in the mortgage process
  • All mortgage lenders do a third-party public records search during the mortgage process
  • Any public records not reporting on credit bureaus will get discovered

Credit Inquiries:

  • A list of all credit inquiries will be listed on consumer credit reports
  • Credit inquiries are creditors who pull credit on your behalf due to you requesting credit
  • Employers can also pull credit as part of their hiring and/or promotional process
  • Insurance companies pull credit on their customers to determine insurance premiums
  • There are two types of credit inquires Hard pull and soft pull
  • Hard pulls will drop consumer credit scores by 2 to 5 points
  • However, the drop in credit scores is temporary drops
  • Credit scores dropped by hard inquiries will go back up in 90 to 120 days
  • Soft inquiries do not affect consumer credit scores

Positive Credit Tradelines Not Reporting On Credit Bureaus

What are positive trade lines that don't report credit bureaus

Every consumer should monitor their credit scores at least three times a year. Credit bureaus are notorious for making mistakes and reporting wrong information. There are instances where credit bureaus do not report positive credit tradelines. For example, say you just got a Chapter 7 Bankruptcy discharged and got three secured credit cards to re-establish your credit. The secured credit card companies are reporting your new secured credit card and payment history to all three credit bureaus. However, only Equifax is the credit bureau that is reporting the secured credit card and payment history. Experian and Transunion are not reporting the secured credit card and payment history. Contact both the creditor and the credit bureaus that are not reporting the positive credit tradeline. Contact the secured credit card company and ask to speak to a supervisor. The credit card company supervisor will dispute the non-reporting credit tradeline to the credit bureaus. Situations like the above are very common and need to get addressed.

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