Higher Credit Scoring Could Create More Homebuyers
When does a minor become a major? You may learn this summer. That is when as many as 12 million Americans could see a slight increase in their credit scores, opening the door for the biggest purchase of their lives – a home.
After significant consumer complaints, and pressure from 31 state attorney generals, the three major credit bureaus have agreed to make changes. Come July, some civil judgments and tax liens will be removed from credit scoring calculations. And that could be a game changer for someone narrowly denied a loan on a previous application.
Most of the affected credit reports are expected to produce 20 point bumps, but, in some cases, might reach 40 points. The changes could be just enough to enable individuals — previously denied a mortgage — to qualify for one.
June is National Homeownership Month, and summertime is traditionally the home buying season. With the positive change in the credit scoring model, it may be time to make an appointment with a Homeport credit counselor to review your credit report.
Minimum scores between 620 and 660 have been the benchmark used by underwriters in approving mortgage loans. Our no-fee, soft-pull of your credit report could show if you are in a better position to be approved for a previously denied mortgage.
The changes are a result of the three major credit reporting agencies, Experian, TransUnion and Equifax, agreeing to re-score information that commonly impacts credit card interest rates, car loan payments or home mortgages.
The changes are the result of a multitude of cases of inaccurate information being attached to individuals. A recently filed tax lien can take as much as 100 points off your score.
Contact Homeport at 614 221-8889, extension 134, to make an appointment in July with one of our credit professionals if you are looking for a home and want to have your credit reviewed. You might also want to consider registering for Homeport’s home readiness and home buyer education classes.
Layden Hale is Senior Counseling Advisor for Homeport.