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FAQ: My score is low will this keep me from getting approved!? Or I got a 750 why didn’t I get approved!?🥵


Believe it or not sometimes your Credit Score may go down... or even be high! But your Credit Worthiness may remain the same... or be low...🤯


Now this is some Advanced stuff so it’s ok if you don’t get it...🤓


But essentially the real “Credit” comes into play when companies do something that’s called underwriting... 🧐


Underwriting simply means that your lender verifies your income, assets, debt and property details in order to issue final approval for your loan. An underwriter is a financial expert who takes a look at your finances and assesses how much risk a lender will take on if they decide to give you a loan. 🤓


First I’ll explain how “Credit Worthiness“ may even be determined... 📃


There are 4 ways to determine the creditworthiness of a consumer:


1. Run a credit report. Using credit reporting agencies like TransUnion , Experian or Equifax. 📊 (this is just like a report card on everything about you basically and what you owe, how many on time payments etc.)


2. Obtain Accounts Receivable/ Aging Reports. 📅 (refers to the outstanding invoices a company has or the money clients owe the company. The phrase refers to accounts a business has the right to receive because it has delivered a product or service. While the aging report is the primary tool used by collections personnel to determine which invoices are overdue for payment. )


3. Check References. 🏦 (just like when a company calls people for references on a job you applied for, at a cost to them they can find out the length of time a consumer has been with a bank and what the revolving lines of credit are.)


4. Perform a Gut Check 🤔( Gut instinct and intuition are critical tools of success. Are you answering the phone? responsive to emails? If the answer is no, you may also be slow to pay bills.)


Credit Score:📋


Credit factors such as your payment history, the amount you owe, how long your credit accounts have been open (your credit history), new credit, and the mix of credit types go into a FICO score. These scores range from 300 to 850; the higher a consumer’s score, the better.📚

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FAQ: If it’s removed off my credit report do I still owe it? 🤔


The answer is simple, if you truly do owe the debt than yes. You’re still responsible for paying it. 😯


This can usually be done by settling on an amount and then paying to have it deleted. ✅


Or by receiving what’s called a cancellation of debt. 😯


Let me explain a 1099c (a charge off or cancellation of debt) is depicted below...

The company decided to give the debtor a 1099c because they want to write it off with the IRS as a tax break. In order to properly do that they have to:


1. Cancel the debt and agree not to go after the debtor anymore. Meaning they can’t collect on the debt because they took a tax break on it... 💥


Most companies would rather not provide a 1099c because if you look in box 6 that is a code for the bureau to delete the debt making it no longer collectible. 😳😳😳


For the one’s that do decide to take the tax break. They told THE IRS they won’t collect so this is why when u have a charge off it may show a 0 balance and if they did sell it to a collections agency to collect.. it’s NOT sold. They have to find someone to collect it besides them.😅


So this is basis enough to have the Debtor have this charge off removed and not collected.. 🤗


Of course the only drawback I suppose here is that a 1099c is viewed as income since you’re having your debt cancelled and you would have to pay taxes on said amount. 🙄


Please consult your tax advisor if you receive one. 🤓

CREDIT TIP:


Something many people don’t know about credit that can help when purchasing a home I learned about is called Rapid Rescore: 👀👀👀


Rapid Rescore is a process offered only by mortgage originators if I’m not mistaken. It allows mortgage applicants the opportunity to update the content of their credit reports much faster than let’s say a regular creditor update.... typically within 3 business days.

📅👀👀👀✅✅✅


Once the content of the reports is updated, new scores are generated IMMEDIATELY.

✅✅✅


This saves the amount of time it would normally take for the creditors to update the credit bureaus; often as long as 60 days.

😩😩😩


Rescore Requirements:


In order to take advantage of Rapid Rescore you must be able to provide your mortgage originator with clear documentation from the creditor of the new information that you would like reported.

📃📃📃📊📊📊

So for instance, you can pay down a credit card and then request a letter from the creditor stating that the balance has been paid in full or something along those lines.

It would require the applicant name, the account number and new balance.

🧾🧾🧾


Rapid Rescore is also good for forcing the correction of any derogatory information such as collections and public records, as long as you are able to provide clear documentation directly from the creditor or reporting entity.

👀👀👀

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