FAQs Regarding Your Credit Report

Hopeful homebuyers typically have lots of questions about the process, many related to their credit report. Let’s look at the most common questions we hear about credit reports and credit scores.

Why do I have three credit scores?

There are three credit bureaus: Equifax, TransUnion and Experian. They are competitors, so they don’t share information. Each bureau scores items a bit differently, which affects scores.

Where does my credit information come from?

When you owe a mortgage, car loan, credit card or other creditor, they may report your balance and payment history to all three credit bureaus. But not always. Creditors may only report to only one or two of the bureaus, causing each of your credit reports to have slightly different information.

That’s not mine! What can I do about errors?

Erroneous information can end up on your report and wreak havoc on your credit score. If there are late payments showing, and you were never late, or accounts showing that aren’t yours, you can file a dispute with the credit bureaus to get the mistakes fixed.

What factors make up my credit score?

Credit scores are based on five factors. The most important one is your payment history, which looks at whether you pay your bills on time. The second is the amounts owed on your revolving accounts (credit cards). The final three, which don’t have as much impact as the first two, are length of credit history, the amount of new credit, and the mix of different types of credit.

How long does it take to raise my credit score?

Depending on your credit file, you may be able to raise your score in as little as 30 days. This can happen by correcting errors or paying off revolving debt. However, if you have recent late payments on your credit report, you’ll have to wait for them to age until they don’t have as much effect on your score, which can take up to six months.

When does negative information “fall off” my report?

Depending on the item, negative information falls off the credit report after seven years. However, Chapter 7 and 11 bankruptcies will be reported for 10 years. The good news is that credit scores are driven primarily by the most recent 24 months. So, even if older items are showing on the credit report, they’re having little impact on your score.

My ex-spouse was supposed to pay that debt. Why is it still showing on my report?

Unfortunately, divorce decrees don’t supersede credit contracts. If you didn’t get the debt out of your name, you’re still responsible for it being re-paid, including any late payments that result.

If your score is lower than average, don’t despair. You can still get a home loan with bad credit in many situations. Reach out to a reputable, experienced loan officer to find out the options available to you for pursuing your homebuying dream.