Mortgage Credit Report: What Is Considered?

Many borrowers are not entirely familiar with what’s even on their credit report and how the mortgage credit report is used in evaluation their borrowing ability.  They may believe they have very good or very bad credit without actually analyzing the report for themselves.

It’s always a good idea to brush up on your understanding of your credit report before choosing a mortgage broker. When you do not understand your own credit, a predatory loan officer has the ability to take advantage of your ignorance. They may inaccurately characterize your financial situation and talk you into accepting a loan term that is not in your best interest, based off of this inappropriate portrayal of your credit capacity and character.

Your loan officer should always strive to present factual information and accurate representations of the loan terms.

Credit reports may vary in terms of detail and amount of data. The most detailed report, called a tri-merged report, contains compiled information from all three credit bureaus – Experian, Equifax, and TransUnion. The score you are assigned by each of these bureaus is a quantitative analysis of your overall credit worthiness (and risk). Information contained in one report is crosschecked against information in the others, and further compared to the information you have provided in your loan application. It is unadvisable to hide or misrepresent yourself during the application process, as your credit report will likely show anything you have left out or lied about.

What’s In My Mortgage Credit Report?

  •  Borrower information
  • A summary of all the contents of the report
  • The credit scores
  • All known public records
  • Filed collections actions data
  • Credit payment histories
  • Derogatory trade lines information
  • Credit inquiries
  • Fraud verification alert information

Who Collects This Info?

The credit bureaus do not actually collect this information themselves. They merely store what is reported to them. When you open a line of credit, your creditor will inform the credit agencies and give them a running tab on how well you are (or are not) making your payments. Sources of such information will come from mortgage lenders, automobile dealerships (unless you pay the entire amount upfront), credit card companies, student loan companies, and retailers. Your public records will also be reported to the credit bureaus, usually by professional public record vendors.

Can I Update My Credit Report?

Some aspects of your credit report can be updated by you personally. This includes changes to your employment or address information. When negative information on your credit report is accurate, you can only wait until it is removed. In general, this is no longer than 7 years, but may be more depending on the type of information and whether or not your old debt is ‘bought’ by another company and renewed.

What About Bankruptcies?

Chapter 7 bankruptcy information will remain on credit reports for 10 years. Certain unpaid tax liens might never be removed. Criminal convictions might never be removed. Credit information reported because of an application for more than $150,000 worth of credit or life insurance may not be removed. Unpaid judgments and lawsuits may stay on your report longer than 7 years if the statute of limitations has not yet run out on them. Additionally, some states only require that negative information stay on your report for 5 years.

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