This guide covers how credit repair can affect the mortgage process and cause a mortgage loan denial. There are several things to keep in mind with how credit repair can affect the mortgage process. Many people want to know the fastest way to repair credit and improve credit score to qualify for a mortgage. Homebuyers need to consider the dangers how credit repair can affect the mortgage process and jepardize getting a home. Credit repair is not necessary to qualify for a mortgage.
Credit repair can do more damage than good. Whatever a credit repair can do, you can do it yourself. Older derogatory credit tradelines will do little to no impact on your credit scores.
Outstanding collections, charged-off accounts, and late payments that are two years old or older has little to no impact on your credit scores. Borrowers cannot have credit disputes during the mortgage process. All credit disputes, with the exception of exempt disputes, need to be removed. Credit disputes during the mortgage process can backfire on borrowers.
Credit Disputes Without Documentation
Repairing credit and improving credit scores can be done but it takes time. However, the errors on your credit report needs to be legitimate. You cannot just blindly start disputing bad credit without supporting documentation.
Getting bad credit can be done literally overnight. However, to repair credit and improve credit score is like making a New Year’s resolution.
Consumers need to make a commitment to repair credit and improve credit score and need to be consistent and not get discouraged because it does take time and effort. It is like going on a diet. There are struggles not to eat favorite foods and see little to no results and eventually give up. In this article, we will cover and discuss how credit repair can backfire during the mortgage process.
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Do Credit Repair Companies Work?
There are thousands of credit repair companies throughout the United States. The problem I run into is finding a reputable credit repair company. I am sure there are hundreds of credit repair companies who are reputable and I am always in a search for them.
Credit disputes without proper documentation will create credit disputes on your credit report. Credit bureaus will not delete the derogatory tradelines without supporting documentation.
I have worked with a few credit repair companies that are absolutely outstanding and reputable before. Unfortunately, the credit repair companies that I have worked with before either sold their business or the owners have changed careers.
Credit Repair Does Work
A credit repair company’s main objective is to repair credit and improve credit scores. They use loopholes in the credit rules and regulations to get negative items off credit reports. I have seen bankruptcies, foreclosures, judgments, and tax liens get deleted off credit reports. However, just because the items are deleted does not mean that the bankruptcy, foreclosure, judgment, and tax liens are off credit record.
Borrowers who are applying for a mortgage loan or any other loan and are asked a question concerning whether or not they had a previous bankruptcy, foreclosure, judgment or tax liens.
Borrowers must tell the truth. In the event, if a mortgage applicant has judgment and state they do not have a judgment on a mortgage application because it is not on credit report, they are committing. Deleting those derogatory information works only with collections, late payments, and charge off accounts.
How Can Credit Repair Can Affect Mortgage Process and Loan Approval
Consumers who intend on purchasing a home or an automobile in the near future, they will need a fairly clean credit report and somewhat of a decent credit score to qualify.
All lenders do a third party national public records search so deleting judgments, bankruptcies, foreclosures, short sales will not work because it will get discovered with a public records search.
The cleaner the credit report and higher credit scores are, the better the chances to get a mortgage approval or loan approval. The cleaner credit report and higher credit scores are, the better the interest rate will be.
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Tips on Boosting Credit Scores and Avoid How Credit Repair Can Affect The Mortgage Process
We will be discussing more on how to repair credit and improve credit scores in future blogs. The first step consumers need to take is to monitor credit report regularly and make sure there are no errors on credit reports. There are three credit reporting agencies; Transunion, Experian, and Equifax.
Check for any errors on credit report. Need to write a dispute letter to each of the three credit reporting agencies. Each of the three credit reporting agencies has 30 days from receiving a letter to respond to credit dispute.
The credit reporting agency contacts the creditor who is reporting you. That creditor needs to confirm that the debt they are reporting is valid. If the creditor does not respond to the credit reporting agency within the 30 days, the credit reporting agency needs to delete the disputed item. Or they are in violation of the Federal Credit Reporting Act (FCRA)
My aunt has been having a lot of problems with her credit, and she would really like to get it repaired in order to get a better mortgage. She would really like to get some help from a professional in order to get it repaired properly, and reduce any problems. I’ll be sure to tell her about how she can get a better interest rate with a cleaner credit report, and a higher credit report.