'Tis That Season ... to Review Your Credit
Rain and thunderstorms are expected today before Chicago temperatures plunge from the mid-40s to single digits ...
The above is the weather report I found for the Chicagoland area today ...
Chicagoland residents are a hardy bunch. Most won't even blink upon reading this weather prediction. We're pretty used to the craziness ...
The recent polar vortex freeze that descended upon the Chicagoland area is a good example of this. After suffering sub-zero winter temps for days, the local weather quickly changed to an upper 40's "heatwave" that saw some people outdoors celebrating on bikes and in shorts.
Yep, we take it all in stride. We plan ahead, make preparations, hunker down, and keep busy inside when our Chicagoland weather turns less than friendly.
During this recent crazy weather pattern, a young newlywed couple in the very preliminary stages of their mortgage process asked me to run their credit report. We had spoken a couple of times prior to their making this request, but nothing "official" had taken place up to this point.
During our initial conversations, they'd talked about their finances and credit histories with me. Then the credit report came back and well, let's just say there were a few discrepancies found between the reported reality and their earlier descriptions.
Now I don't think there was any attempt on their part to mislead me or to misrepresent the facts, their credit past, or financial standing. I just don't think either of them fully understood the credit history of the other prior to their being together ... or had a firm grasp on their current credit status or financial standing as a couple.
We have some work ahead of us in order for them to secure financing. But I'm happy to report that each has rolled-up their sleeves and is focusing on improving their credit scores and financial standing as I write this.
Unfortunately, this predicament isn't all that uncommon. When there are couples or multiple borrowers involved in a mortgage application, it occurs with some frequency. Mortgage application and credit report "pulls" some times turn into illuminating experiences. Neither is a good time for surprises to take place.
And this brings me back full-circle to my intro regarding our recent weather challenges here in Chicagoland ...
For those thinking of buying a Chicagoland home soon or sometime in the future, bad weather that forces us inside can provide the time and perfect opportunity to perform a credit check.
Credit checks are what I've been recommending to everyone as of late.
An annual credit check is very wise. And the importance of taking advantage of this opportunity ... and doing so well in advance of starting the home buying process ... was perfectly proven by my young clients.
Had they performed a credit check earlier it would have been extremely beneficial for them. They could have started their credit repair and credit improvement long ago, and already raised their credit scores. Higher credit scores equate to saving money.
But because this couple waited to check their credit and seek info and guidance, they just now learned the facts pertaining to their credit scores and standing. They just now are beginning to pay down their debt more advantageously and strategically.
And I cannot emphasize this enough: If this young couple had run a credit check previously, they would currently hold a much clearer and truer picture of each other's credit history. Something of great importance for a great many reasons.
Each of us is entitled to this under the current federal credit laws. Federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company.
Those companies are:
P.O. Box 2002, Allen, TX 75013
888.397.3742
P.O. Box 2000, Chester, PA 19016
800.916.8800
P.O. Box 740241, Atlanta, GA 30374
800.685.1111
Running this free credit check annually will help you:
- Discover if errors exist on your credit report
- Detect identity theft or credit card fraud that may have taken place
- Monitor your financial status
- Keep your credit reporting information accurate
- Rebuild your credit
- Improve upon savings
If you're considering the purchase of your first home, here are some additional helpful "homebuyer-to-be" tips:
- Review ALL of your open credit card accounts often
- Compare their CURRENT balance to the AVAILABLE credit limit (One of the biggest mistakes I see prospective buyers make concerns credit card limits. Too many allow balances to exceed credit card limits ... or almost as bad, allow balances to stack-up right below their limit)
- Borrowers should strive for balances at (maximum) 47% of their available credit limit to maximize credit scores
- DO NOT CLOSE OUT any credit cards prior to applying for a mortgage. Cards need to remain open with the lowest balances possible VS their limit (as mentioned above).
- The longer an account is open and has a reported account history, the more "weight" is given to that account. Newer credit holds less "weight" because it has a shorter credit history reported
- If you think you need info and help regarding your credit, contact a Loan Officer/Mortgage Originator. Again, do this well in advance of hoping to buy (or refinance).
Most Originators provide this advice free of charge, so why wait?
The benefits of seeking this help go way beyond those found while seeking and securing a Mortgage. Higher credit scores can lead to lower interest rates when borrowing money on homes, cars, and other types of loans. They can also improve the homeowner's insurance policy (and quoted rates) available to you for your purchase.
If challenging and blustery weather conditions have you inside for the day or even a few hours, take advantage of that time. Head to www.annualcreditreport.com or one of the 3 main credit bureaus to check your credit. You'll be better off for it ...
* Are you hoping to buy or refinance a home or investment property in New Lenox, Will County, or elsewhere in the Chicagoland, IL/Wisconsin area?
Contact Me! I'll put my 40+ years of mortgage experience and expertise to work answering your questions and fulfilling your financing needs.
I'm easily found at:
Gene Mundt
Mortgage Originator - NMLS #217987 - IL Lic. #031.0006220 - WI Licensed
American Portfolio Mortgage Corp.
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including: The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.
Referrals are Greatly Welcomed & Appreciated!
As a Loan Officer, I can tell you though ... too many people do NOT understand or utilize these important financial basics. And I see the results of this playing out on way too many consumer credit reports and mortgage applications.
815.524.2280 
