Credit ratings are generated by 3 major credit agencies (Experian, Equifax, and Transunion). Each uses a special method. The greater the number, the better your credit standing. Specific activities may have a adverse impact on your rating and will potentially prevent you from being approved for a mortgage. Below are precautions for potential Florida home buyers on credit activities that impact your rating.
Credit Activities That Impact Your Rating
Tardy Bill Payments
Delinquencies demonstrate poor credit habits and subsequently lower your ranking. How late you are (30, 60, or 90+ days) and how frequently it occurs also play a role. Late payments stay on your credit profile for a very long time.
Accounts Submitted to Collections
If you are really behind on payments and a credit provider has given up on their own attempts to retrieve payments from you, they will likely move your account to a collection company. This is included in your credit report. A settlement will not remove this from your file.
Lender Charge-off
If a lender is unsuccessful in collecting the total balance of the loan, they may "charge-off" the uncollected amount. This could apply if you completely fail to pay or if you settle for a partial amount. Settlements stay on your credit file for seven years. New creditors will view this history and contemplate whether you will continue with that behavior.
Matters of Public Record
Bankruptcy, tax liens, judgments, foreclosures, and other similar actions are a matter of public record. Regardless of whether you pay off these debts, the initial recording is reflected in your credit rating. Certain items remain for up to 10 years whereas others (such as liens) never disappear. Clearly, it is better to not let credit issues get to this point.
Precautions For Potential Florida Home Buyers
All of the credit activities that impact your rating offered in this article make you a risky borrower and will possibly result in higher mortgage rates or prevent you from getting approved for a mortgage. Practice conscientious payment patterns and it will save time, money, and headache when it comes to buying a home. These are the best precautions for potential Florida home buyers. this covers only a few typical credit issues. Consult a credit professional for guidance on your specific situation.
