One of the first things you learn as you become an adult and go out into the world is that credit and where our credit score stands is a fixture in all our lives, whether in pursuit of new employment, opening or expanding a business, shopping for a new house or car, renting an apartment, or even simply applying for a credit card to use for household expenses.
I guess you could say that credit is similar to that song “Love makes the world go around,” but you can substitute the word “credit” for “love.”
People looking to rent an apartment need good credit for the landlord’s approval. People shopping for a house must typically coordinate their proposed purchase of the house with a mortgage in order to put together the necessary funds to complete the purchase—all of which is credit-score based. In applying for this mortgage, they must be able to show credit scores high enough for the mortgage bank to approve their application and subsequent mortgage.
For those of you who have never gone through the process, the first step taken by the bank is to pull a credit report on an applicant to see what their credit looks like. Hopefully the credit report shows a nice and clean credit history, one where the applicant pays all of his (or her) bills on time and their credit obligations are not too cumbersome. This is the ideal candidate for a high credit score and good chance of mortgage approval.
But what happens to those mortgage applicants who suddenly find that certain credit obligations that they thought were removed from their report years ago (and negatively affect their credit rating) have suddenly resurfaced? These are obligations that they thought were expunged but are now causing them new difficulties in obtaining mortgage financing and by extension, causing them new difficulties with any new situation in their lives that requires a clean, positive credit report. What can they do?
Many years ago, when this used to happen, the first thing to do was to ask the applicant to review any negative information and see if there are any errors. Years ago, errors were very common and it could take months if not years to get them removed from a credit report since there was no law such as we have today, which requires the credit bureaus to remove derogatory information from the credit report within 30 days if it is not verifiable.
In fact, it was not unusual back then for someone applying for a mortgage to pay off these collection accounts even if they did not owe the money requested, just to make sure the collection accounts did not cause them to be turned down for the mortgage, and as a result, cause them to lose their desired house.
Today, better oversight by the government has made getting rid of these errors easier and quicker. The minute you call and challenge the validity of a collection account or credit account on your report, it is the responsibility of the credit reporting company to either verify that the account in question is completely verified within 30 days, or the account must immediately be removed from the credit report of the person challenging the issue.
By doing this, no one has to be stuck with paying a credit that has mistakenly been placed on their credit report due to fear of running out of time for the correction to appear and their credit score being updated accurately. Thankfully, fixing one’s credit score has never been quicker or easier. n
Anessa Cohen lives in Cedarhurst and is a Licensed Real Estate Broker (Anessa V Cohen Realty) with over 20 years of experience offering residential, commercial and management real estate services. You are invited to visit her website at http://www.avcrealty.com/. She can be reached at 516-569-5007 and readers ae encouraged to send any questions or comments by email to anessa@avcrealty.com.
