Your credit report can have a big impact on your life. All conforming mortgage loans, that is mortgages that go through Fannie Mae or Freddie Mac, are currently underwritten based on Risk Based Pricing. So are government loans, FHA , VA and USDA being the most common. That means the interest you will pay is based on the amount of risk that your credit report shows you are as a borrower. This is based on your credit score and your loan to value. EVEN BORROWERS WITH THE BEST CREDIT SCORES CAN BE CHARGED EXTRA IF THEY HAVE LESS THAN 25% EQUITY IN ANY PROPERTY ON A CONFORMING MORTGAGE LOAN. But the amount you will be charged for the loan to value will be more for lower credit scores than higher scores.
Your credit report is a record of all of your reported credit activities. It lists all of your credit card accounts and loans, the balances as well as your payment history. It also shows if any legal action has been taken against you because of unpaid bills such as a collection account, lawsuit, judgement or bankruptcy filing. Because businesses use this information to evaluate your applications for credit, insurance and employment, it’s important that the information in your report is complete and accurate, especially if you plan to purchase like a home or refinance your current home.
The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC), is designed to promote accuracy and ensure the privacy of the information used in consumer reports. Under the FCRA, both the credit reporting agency (CRA) and the organization that provided the information to the CRA (usually the credit card company) must correct any errors or incomplete information in your report.
If you do encounter a mistake on your credit report, several steps need to be taken to correct the matter. The Gordon Group will be happy to help you with this, but most of it must be undertaken directly by the person whose credit has been inaccurately reported:
1.One of the easiest ways to solve this problem, is to go to http://www.mycreditreport.com. Another good website for a free credit report is www.creditkarma.com. You will be able to access your credit report for free and put in any disputes/corrections that you have. It can take 30-60 days for some of those corrections to show up, but usually you are notified when they do. That is why it is so important to begin the process prior to the time that you want to apply for a mortgage. The pricing of your loan is based on the credit report turned in with the initial application. If corrections get made and your score is improved during the processing of your loan, we cannot use the new credit score to improve the interest rate. There are ways that we can get the scores improved much faster, but they can be very costly. Doing it through this website is free to you, so always the chosen method. Even if we do not need to improve your score, often times there are things on your credit report that an underwriter will request be removed before approval of the loan.
2. You can also clear up mistakes on your credit through other methods. The first thing to do is get a copy of your credit report from each of the three major CRAs: Equifax, http://www.equifax.com; Experian, http://www.experian.com; and TransUnion, http://www.tuc.com. In a written letter, tell the CRA what information you believe to be inaccurate. Include copies (not originals) of documents that support your position. Provide your complete name and address, identify each item in your report you dispute, and request deletion or correction. You must include a copy of your driver's license and social security card. Be sure to make copies of your dispute letter and enclosures.
3. Send your letter by certified mail, return receipt requested, so you can document what the CRA received.
4. The FCRA mandates that all CRAs reinvestigate the items in question — usually within 30 days — unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the credit card company. After the credit card company receives notice of a dispute from the CRA, it must investigate, review all relevant information and report the results to the CRA.
5. If the disputed information is found to be inaccurate, the credit card company must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file.
6. When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the credit card company verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the credit card company.
7. In addition to the CRA, you should also write to the credit card company about the error. Again, include copies of documents that support your dispute. If you are correct — meaning the information you disputed is found inaccurate — the credit card company cannot use it again. Further, at your request, the CRA must send notices of corrections to anyone who received your report in the past six months.
Please discuss credit problems with us. We are knowledgeable about what can be changed and how to help you do that. If we don't have the answer, we have experts to get that information from for you. Please take advantage of our years of experience!
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