Articles Tagged With: Credit Reports

January 30, 2014

FHA Loans, Credit Reports, And Identity Theft

One of the most oft-repeated bits of advice related to FHA home loans or refinance loans is that it’s best to start early–at least a year in advance–when planning for an FHA loan application. One of the reasons to start early involves the length of time it can take to check your credit report to learn your credit score and to make sure there’s no erroneous data or evidence of identity fraud on your report. With recent headlines about credit card data being stolen from major retailers, this advice couldn’t be more helpful. The Consumer Financial Protection Bureau (CFPB) is urging customers of “big box” retailers recently in the news for data breaches and hacking problems to check their credit card activity and credit reports for signs of fraud or | more...

November 19, 2013

Credit Qualifying Information For FHA Loans: What Your Lender Needs

By Joe Wallace

It’s good to understand the process of FHA loan approval. Knowing what your lender is looking for on your credit application is an important part of being ready for an FHA mortgage application. When you fill out your credit forms, what does your lender do with all that data? When it comes to your credit information, the lender doesn’t just rely on what’s provided on your paperwork; FHA loan rules listed in HUD 4155.1 say the lender must request a credit report that consists of information from the three major credit reporting agencies in something called a Three Repository Merged Credit Report or TMCR. That data must include: –all inquiries made within the last 90 days –all credit and legal information not considered obsolete under the Fair Credit Reporting Act (FCRA), | more...

June 7, 2013

FHA Loan Questions: Applying for an FHA Loan With No Credit Card History

By Joe Wallace

A reader asks, “I have a credit score of 662, but I have no outstanding credit. I do not have any credit cards open, nor a car loan (loan was open in 2003)I have 0 installment loans, 0 credit cards, 0 retail cards. How can I get approved for a home loan? I have had credit in the past, but closed my accounts when I moved out of the country in 2001 and never got any credit cards again.” FHA loan rules address this in HUD 4155.1 Chapter Four, Section C. That section says in part, “Past credit performance is the most useful guide to • determining a borrower’s attitude toward credit obligations, and • predicting a borrower’s future actions. Borrowers who have made payments on previous and current obligations | more...

June 28, 2012

FHA Loan Reader Question: Checking Credit Scores

By Joe Wallace

A reader asks, “I did have bad credit at one time but I would say I have good credit now. I found out I had 2 things against me but I have taken care of them, they were small amounts but they would be the only thing against me over the past 5 years. I have paid off a car that I paid for over 5 years and also several small loans.” “I am buying a mobile home through the owner but I want to build a house on some property that I own and I am not sure about my credit score and wanted to know if there is any way of finding out if I would be eligible for an FHA loan without applying for the loan and | more...

May 24, 2012

FHA Loans, Your Application, and Credit Reports

By Joe Wallace

When you apply for an FHA home loan, there are several pieces of required information you need to complete the application. One is your work and residence history, another is the nature of your income, and still another is your credit data–what lines of credit you currently have and how much you owe. When the lender receives your application, all this information is verified according to standard procedures as described in the rules for FHA home loans. The loan officer must request your credit report, in the form of something called the Three Repository Merged Credit Report or TRMCR. What many FHA loan applicants don’t know is what the lender is looking for from this report. According to HUD 4155.1, Mortgage Credit Analysis for Mortgage Insurance on One-to Four-Unit Mortgage | more...

January 3, 2012

FHA Loan Credit Guidelines

By Joe Wallace

We get many reader comments and questions about qualifying for FHA guaranteed home loans. Borrowers new to the home buying process are often concerned that they may not qualify for an FHA mortgage loan because of student loans, past mistakes with credit or other factors. While the FHA does have rules and regulations concerning these areas, borrowers should know that the rules can be more forgiving than some might assume. In its instructions to lenders in HUD 4155.1, FHA loan rules state: “Past credit performance is the most useful guide to

December 1, 2011

FHA Loans: How Lenders Evaluate Non-Traditional Credit

By Joe Wallace

In a recent blog post we answered a reader question about FHA home loans and non-traditional credit. Can an FHA loan applicant qualify for an FHA home loan even if they have limited credit history or a history of non-traditional credit? The short answer is yes–after all, not all FHA borrowers choose to apply for credit cards, some buy their vehicles in cash, and don’t have many of the credit needs that others do. The reader asked, “would the FHA look at our utility bill payment history instead of credit history?

November 28, 2011

FHA Rules For Credit Reports and Tax Returns

By Joe Wallace

Part of the FHA loan application process includes the lender running a credit check on the applicant. Depending on the type of loan and other factors, the lender may also need to contact current and/or former employers, landlords and other people who can verify income and employment data given on the FHA loan application form. Some borrowers, including those who are self-employed, freelance or small business owners may be required to furnish additional data including tax returns, business statements and other information which can help the lender establish a history of income, credit, and employment. Some of this information is provided by the FHA borrower, some is provided by third parties (such as employment and income details) and some must come from official sources. For example, tax returns must be | more...

November 8, 2011

Credit Report Requirements for FHA Home Loans

By Joe Wallace

To be processed by a lender, FHA home loan applications require detailed credit information from the three major credit reporting agencies. The lender uses these reports to determine that an FHA loan applicant meets the minimum credit requirements for a FHA home loan. Those requirements include the FHA minimum credit score and any additional credit score requirements set by the lender. The FHA minimum credit score must be above 500, but lenders frequently require scores at 620 or better. In order to get this credit score information, the lender can’t simply check–there is a specific set of procedures required for a credit check to “count” as an official representation of an FHA loan applicant’s credit worthiness. For example, the FHA rules say the credit data must come directly from the | more...