Home mortgage lenders look at your employment history and credit history as qualified indicators of how responsible you are in meeting your financial obligations. At a minimum, they will want to see your employment record for the past two years and will scrutinize closely any past due payments of over 30 days. In addition, they’ll look for late credit card payments over the past 6 to 12 months.
Your credit record is maintained by 3 primary credit reporting institutions; Equifax, Experian, and the Trans Union. Prior to applying for a loan, it is important to check your credit rating at all three agencies to see if there are any incorrect reports or valid negatives (derogatories) that you’ve forgotten about. Often, a negative item -referred to as a “ding” or “credit ding”, can be explained with a letter attached to your loan application package.
Things to be aware of and that Underwriters will make note of include a history of late payments, frequent job changes, previous foreclosure, bankruptcies, Judgments against you, bounced checks and low bank balances. Other items may be factors as well.
If you feel that your credit profile is sub-par and may not pass an Underwriter’s examination – there are things you can do about it to improve your credit worthiness. A good place to start preparing for this process can be found by going here.
Be careful about credit repair organizations that want you to pay in advance before services are rendered. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the promised services.