My previous column detailed three common myths that I hear about credit reports and their effects on financing a home. Having worked in the mortgage industry for a while, I’ve heard a lot of them.
Since last month, I received a couple more questions about this topic. Here they are:
Myth: The credit bureau is the one who approves or denies your loan.
There are three main credit bureaus that report your credit scores. They are Equifax, Transunion and Experian. These reporting agencies compile information from your creditors and neither approve, nor deny your mortgage loan.
Lenders are the ones who decide based on what’s in the credit report.
Myth: If you pay off a past-due account, it will be removed from your credit report.
It can take up to seven years for a derogatory account to disappear from your credit report. Time must elapse to rid your report from a negative account, judgment or collection.
As such accounts age, though, typically your scores will increase. However, if you continue to receive negative reporting for things like paying accounts late, then it may prevent your score’s improvement.
Regardless of any “myths” you may have heard, my team (813-707-6200) has helped countless people obtain mortgage financing who were leery because they listened to them. Let me know about any myths you may have heard, and the answers may end up here in the future.