Home Loan Credit Advice From Credit Watchdogs

November 7, 2019

There are many consumer watchdog organizations helping people learn more about how credit works and what it takes to get a better FICO score so you can get more competitive interest rates and down payment requirements from a lender.

Some of these agencies are private concerns, including (but certainly not limited to):
 

• Americans for Fairness in Lending
• Association of Certified Fraud Examiners
• Association for Consumer Research
• Association of Home Appliance Manufacturers (a consumer action program)
• California Consumer Rights Association
• Call for Action (a group of associated consumer call centers)

One of those watchdog agencies is operated by the Federal Government; the Consumer Financial Protection Bureau (CFPB) is charged with informing borrowers of their rights, helping consumers make informed decisions about credit, and much more.

What kind of credit advice does a house hunter need before contacting a real estate agent or realtor to begin the journey toward home ownership? According to the CFPB, consumers need to be proactive about checking their credit reports and making sure there are no errors or old, outdated information there.

There are several areas that could be “routine” problems you might have to address, including the following concerns according to the CFPB:

Closed accounts reported as open;
Your name is listed as the owner of a credit account you are only an authorized user for:
 

• Accounts that are incorrectly reported as late.
• Accounts incorrectly listed as delinquent.
• Incorrect date of last payment or date opened.
• Incorrect reporting of account delinquency.
• Identical debts listed twice or more.

Note that identity theft or other concerns are not listed here; those are different topics for different articles. Our main purpose here is to demonstrate how easy it is to have problems with a credit account through simple human error. And those problems should be corrected before you begin the loan approval process.

It takes time to fix credit reporting errors, let alone addressing identity theft or other credit-report related problems. Give yourself as much time as possible to work on your credit report before you hit “Send” on your mortgage loan application or refinance loan paperwork.

You can learn more about credit and what it takes to get approved for an FHA loan, or search for down payment assistance programs or home buyer grants near you.

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