July 22nd, 2019


Have you been spending time with your applicants scrubbing their credit report in detail, or do you simply state their scores and move on? Well if it’s not the former, not only could you be hurting yourself, you could be hurting your clients. The CFPB’s most recent report, Market Snapshot: Third-Party Debt Collections Tradeline Reporting, which analyzed consumer credit reporting from 2004 to 2018, found that over a quarter (28%) of consumers have at least one 3rd-party collections tradeline* on file. The main culprits: medical collections (58%) and utilities/telecommunications debt (20%). However, it’s also been shown that many consumers are unaware of what is on their reports, and it is fairly common for reports to carry inaccurate information. As a mortgage specialist, it is your resposibility to take time with your customers and scrub their credit report with them, highlighting both the positives and the negatives, in order to give them the most detailed and accurate picture of their credit standing. Make sure your customers are aware of what is on their reports and work with them to improve their credit when necessary. By improving a consumer’s credit score, especially when their report holds inaccurate information, you could be saving them tens of thousands of dollars in interest payments. That’s a differentiating factor no competitor can match.

*Tradeline: Information about a consumer account that is sent, generally on a regular basis, to a credit reporting company. Tradelines contain data such as account balance, payment history, and status of the account.

Beau Vermillion