Over Coming Common Mortgage Problems - Credit Problems - Part 2

by JoAnn Young, Florida Realtor & Mortgage Broker, Melbourne, FL

This article is the second in a series for overcoming common mortgage problems in a loan application.  In this article I would like to address the subject of  Credit Problems.
When you seek to take out a mortgage, lenders examine your credit history, which is detailed in your personal credit report.  Your current debts and credit history can produce a number of red flags that may make lenders skittish about lending you money.  Allow me share with you how to deal with the typical problems that concern lenders:

Credit report boo-boos
Remember the music or book club that joined way back when?  Remember the barrage of letters that they sent reminding you that you were delinquent with your payments?  That club may get its revenge in a very painful manner.  Creditors can and WILL report your loan delinquencies and defaults and these blemishes show up on your personal credit report.
The following is a suggested plan of attack to cure the problem:
1.  Be proactive.  if you know that your credit report includes imperfections, write a letter to the0 creditor explaining why the problem exists.  Maybe you were late on your loan payment because you were out of the country and did not get your bills processed on time.  Maybe you lost your job unexpectedly and fell behind until you located new employment.

2,  Talk to understanding and flexible lenders.  Some lenders are more sympathetic to the fact that you're human and have sometimes erred.  As you speak with different lenders, inquire whether your previous credit blemishes may pose a problem,

3.  Look to the property seller for a loan.  Property sellers who are interested in being the lender can also play a role in your financing until you are able to secure a traditional loan.  Those who check your credit report may be more willing than banks and lenders to forgive past problems, especially if you are financially stronger today.

4.  Fight and correct errors.  Credit reporting agencies and creditors who report information to the agencies make mistakes!    Unlike our legal world, you are guilty until proven innocent.  Start by identifying the incorrect information.  If the information pertains to an account that you never had, it is possible that the account and any derogatory information belongs on someone else's report.
To get the errors corrected, you must be willing to be patient, persistent and be a bit of a pain. By law, the creditors only have a certain amount of days to respond to your inquiry..  Should you get the runaround, ask to speak to a supervisor or a manager until you receive satisfaction.  If this technique does not work, call your better Business Bureau and file a complaint.  You are also permitted to make a statement of contention on your credit report so that potential creditors may see your side of the story.

5.  Save more and build a better track record.  If you can continue to rent, build yourself some more time.  Sometimes a little more time will do the trick.  Spend a couple more years saving more money and keeping a clean credit record.
I will be writing another article on credit scoring and FICO at a later time.  You will find several articles I have already written on credit scoring in the index of this website if you want more information.

In part three of our series I will be discussing Debt.  I hope this series is informative and helpful.  Please call me with any questions you may have or if you would like to see if you pre-qualify for a mortgage now. - or you can email me by clicking on my name. JoAnn Young, Peoples First Financial Services, Melbourne, Florida  321-243-4917