Credit Bureaus…are they accurate?
The simple answer to this is yes, most of the time. And what happens when your credit bureau is not accurate? Errors or omissions on your credit bureau can have a detrimental effect on your ability to qualify for a mortgage. Recently, we ran into a few hurdles with a first time home buyer. At first glance, the applicant looked great on paper and we instructed him to go house shopping. When he found a house and we submitted for an approval, the deal was declined not once but twice, by two different lenders. Both lenders had an issue with the lack of current revolving credit (the applicant had credit he just paid it all off or hadn’t used it in a while). As we continued to press for financing, we found a lender that would entertain his application and provide funding. After discussing the situation with the applicant it was discovered that the applicant carried an American Express card that had been used recently. Checking his credit bureau we noticed the American Express was not listed (the American Express card is the “Holy Grail” of credit cards as it relates to credit worthiness). We immediately thought duplicate bureau and called Equifax. Unbeknownst to the applicant, we were correct, there were two bureaus. The two credit bureaus were in the Equifax system separated by a different birth date(usually caused by human error on input). Bureau number 1 (DOB June 18, 1989) was the older inputted information and contained all the applicant’s current credit including the AMEX card. Bureau number 2 (DOB June 18, 1999) had the applicant’s correct birth date(this was the bureau we received upon request) but did not have all the applicant’s credit history. After bringing the mistake to Equifax’s attention they combined the two bureaus.
Thinking about purchasing real estate? This is a perfect example of why it is important to check your credit bureau as to make sure it is correct and not omitting any information. Lenders use this information as the number one way of assessing your credit worthiness. We are quite certain if the AMEX card was listed on the applicant’s bureau originally the application would have been approved on the first try creating a stress free experience for the borrower.
Have credit questions? CALL US 519-495-4281!
Thanks for reading,