Mortgage approval depends on two factors — the worthiness of the property to act as collateral for a loan, and the worthiness of the buyer to borrow money. How does a lender evaluate a person’s trustworthiness as a buyer? By checking their credit reports and credit scores. The better the borrower’s credit, the lower the risk of lending to them.
Credit Reports
Several private companies, known as credit bureaus, aggregate data on every American citizen and compile it into credit reports — their detailed history as a borrower or bill-payer. The three major credit bureaus that prepare these reports are Equifax, Experian, and TransUnion. A lender may request credit reports from one, two, or all three of these bureaus to evaluate the risk of lending to this person. What Is On A Credit Report? Credit reports compile a variety of information that lenders use to predict whether you will pay back the loan as agreed. This includes:
Payment History. Whether or not you pay your bills on time and in full. If you are delinquent on your bills, the creditor may report the delinquency to the credit bureaus, creating a black mark on your credit. Derogatory Marks. Bankruptcies, evictions, foreclosures, judgments and things that happen in a court.
RITA REALTOR | BROKERAGE 904-555-5555 | Rita@realtor.com | www.Authorify.com
LARRY LOAN OFFICER | OFFICE 904-555-1010 | Larry@loans.com | www.Authorify.com
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