Sunday, April 18, 2010
Has anyone noticed how your credit score has determined how people look at you? I have pulled two credit reports for two different borrowers applying for a non-conforming jumbo loan. When the loan application was originally submitted and the credit report was pulled, both borrowers had above 750 scores without blemish one on either report. Another report was pulled by the lender prior to closing and both borrowers had an, out of no where, hit resulting in a 120 point drop in their scores. These people have never missed any payments, have large incomes, long time employment and a low debt to income ratio. One of the reports we were able to get the item completely removed and had the file re-scored but the other just has to wait until the scores rebuild. Regardless of the end results, neither borrower will suffer, the system completely ignores the other credit history. Never missed a payment, willingness to pay and low debt to balance ratio use to mean something. You can have all of these items but one slip and years of credit building erodes. This system needs to be altered. Until it is it will be one of the mysteries in the mortgage business and other businesses relying on credit reports.