Credit Report

On every loan application lender do pull and review credit report for all borrowers. Credit report summarizes all credit activities timely updated by 3 credit agencies namely Equifax, Experian and Transunion. Each agency do rate individual based on his credit history and proposes a score known as credit score which is most important factor for approval of loan application.

What lender primarily look into credit report is as to how borrower has dealt with his trade lines (debt) in past. It analyses history for each reported account specifically looking for delinquency if any. Recent delinquency in 12-24 months is not desirable. Moreover on mortgage accounts its certainly not acceptable. Lender might refer back to borrower to seek clarification for reported delinquencies. Lender record balance and payment on all active accounts and include it in a total debt to calculate Debt to Income ratio on given case file.

Other important information that lender looks into credit report are credit inquiries in recent 120 days. Recent inquiries means borrower might have also applied for loan with other lender or is looking for altogether new loan. Lender do prefer to check if these inquiries resulted in any new accounts. If so lender confirms balance and payment to include it in total debt.

Credit report also has Public Records information for any Tax Liens, Judgements, Bankruptcy and Foreclosure. Lender is always cautious about this and prefer it to be satisfied and closed. Moreover for Bankruptcy and Foreclosure it prefers minimum waiting period.

In addition to above discussed factors lender do review consistency for borrower name, SSN, current address, recent addresses and employment details.

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