Taking it, giving it, extra…these are common types of credit that most of us don’t mind encountering. Yet there’s another type that follows us everywhere that requires a lot of attention – and makes a lot of people nervous: Our personal credit scores. With real estate and mortgage financing making news for several years straight and the widespread effects they’ve had on the economy, credit is getting more attention than ever before. Important things to know?
Bills and payments that haven’t traditionally been included in a person’s credit report will start showing up and credit reporting agencies will start providing far more invasive information – like estimates of a consumer’s income. Take note and pass on these things that didn’t used to automatically get included in your credit report that will start becoming available in a separate score available to mortgage lenders:
- Payday loans
- Evictions
- Child support payments
- Rent, utilities and cellular bills may also eventually be tracked
This is a bad-news/good-news situation. Banks and mortgage lenders feel these new inclusions will give them a better way to evaluate potential borrowers, but this additional information can eliminate some people from qualifying for a loan or require them to pay higher rates or fees because they are considered higher risks. On the other hand, people who have little or no credit history will have other ways to show that they have paid their bills on time with things like monthly rent payments appearing in their history. Currently, folks who save money, pay their rent and utilities on time but don’t have any credit cards or finance history suffer similar scrutiny to people with some “dings” on their credit records.
As lenders try to avoid the practices that led to the infamous “Mortgage Meltdown” and subsequent real estate market slump, consumers need to keep up with all the things that can affect their credit score and their ability to receive credit and borrow money. Our credit score follows us everywhere we go like a “personal financial shadow.” Make sure you’re not in the dark.
Want to learn more? Contact Carrie today. Ready to start the pre-qualification process for a mortgage, but concerned about your credit, or lack thereof? Carrie can help. Start the pre-qualification process online or call Carrie at 952-808-2810 to start the process over the phone.
If you’re a first time home buyer, credit can be mystifying. We host a Free First Time Home Buyer Class each month to take some of the mystery out of the process of buying your first home. Our next Free First Time Home Buyer Class is scheduled for Thursday, February 9th from 6:30-8PM. Register online for the February First Time Home Buyer Class or call 952-808-2810. No matter where you are in the process of buying your first home, it’s never too early to start the learning process!
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