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October 18, 2019
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Pulling credit may not make sense

By: Scott Sheldon
April 19, 2019

Everyone wants to be a credit expert especially when it comes time to getting a mortgage. The unfortunate truth is most people do not have the expertise or time to accurately enhance their credit scores. If you’re trying to work on your credit for getting a mortgage here’s what you should plan for…

There are many credit reporting services available today. It is a great concept, however, these credit reports are not the same as a financial credit services report that a mortgage company obtains in granting you a home mortgage. If you’re in the predicament of trying to get your credit score up, here’s a couple things to just keep in the back of your mind…

You might not need to get your credit score up at all. If your credit score is 600 and you’re trying to get your credit score up to 620 and you’re looking at an FHA loan, for example, it’s not going to really make that much of a difference. If you’re looking at a 700-credit score mortgage to a 720-credit score mortgage, for example, and you are looking at a conventional loan, same thing: it’s not really going to change anything, one way or another. Be realistic about where you are going. Here’s an example of an impossible credit score of 580 and you’re looking at an FHA mortgage which otherwise might be a little bit pricey with that type of credit score and you’re trying to get to a 700-credit score, so you can get a conventional mortgage. That’s an extremely tall order at least one or two years in the making realistically speaking.

Let’s say, for example, you have a beef with a creditor and for whatever reason the creditors told you that the credit account that you are in dispute over is going to be falling off your credit report…

First off, you can’t get a mortgage if you have an account in dispute. Any account that you have a dispute must be removed from dispute status first and then proceed with financing.

The question you need to ask yourself is, what happens if the debt that I’m trying to get resolved does not get the result I am looking for, am I still going to refinance my house or still purchase the house? If the answer is yes, and uncomfortable as it might be, rip off the Band-Aid and let the mortgage company pull their credit for what it presently is.

The mortgage company has tools at their disposal and it’s probable that the loan officer that you’re talking with (if they are willing) has much more expertise,  tools and resources at their disposal to increase your credit score via a rapid re-score than you do as a consumer operating off some sort of free.

Mortgage companies pay quite a bit of money for their credit reporting services and have the latest state-of-the-art tools to help you get your credit scores up if it’s necessary for trying to qualify for a loan. Let the lender do their job. Don’t try to control the process when it comes time to getting a mortgage. In other words, simply surrender. By surrendering and allowing the lender to go through their process, you can get real, true first-hand information about what it takes to qualify as well as a pragmatic plan to help you get qualified if there is some sort of adversity in your financial profile. It’s critical to work with a lender who operates like this if your goal is successfully getting a mortgage.

Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.