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A new credit scoring system has arrived – How to prepare to purchase a home in Macomb County MI

July 31st, 2012 · No Comments · mortgages in michigan, tips for home buyers

Late last fall I started reading about a company called CoreLogic and their enhanced way of looking at a consumers credit and payment history.   One of the newest articles describing what they do (and how it could affect you if you are considering purchasing a home and applying for a mortgage) can be found here.

The traditional way of credit reporting (payment history, amount of open loans, etc) was keeping many home buyers out of the market if they didn’t have enough of a credit history.

CoreLogic found a way to address this, and now taps in to a non traditional way of looking in to a potential borrowers credit past using  items like payday loans, utility bills, child support payments, etc.

It will be interesting over the next year or so to see how this really affects my buyer clients when they apply for a mortgage.  Will the more traditional FICO scoring and credit history weigh more to a mortgage lender & underwriter, or will the non-traditional payment items weigh heavily in their decisions on whether to approve a mortgage loan?

One thing I do know is this:   Mortgage lenders want to be assured that they have a good chance of being repaid.  Lending guidelines are still tight.  If you pay your bills in a more non-traditional way (cash, money order, pre-paid debit cards, etc) pay all of your bills on time.  The bills that normally didn’t show on your credit report (child support, payday loans, etc) will now be finding their way in to your payment history, whether we like it or not.  You don’t want any of those “past” issues coming back to haunt you when you’ve found the house of your dreams.

 

Kris Wales – a partner for your real estate needs in Macomb County MI
SEARCH Metro Detroit homes for sale
Contact Kris – (586) 536-5453 cell

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Important copyright information: All photos were taken by Kris Wales. Do not copy and use photos for your own use, whether it be for personal or commercial purpose. All articles were written by Kris Wales. Once again, do not copy and use for your own purposes. Important disclaimer: Views expressed on the blog by the author and commenters do not express the views of Keller Williams Realty. All information contained is deemed to be reliable at the time of posting but not guaranteed.