NEGATIVE CREDIT INFORMATION

 It's 2014.  We made it through another holiday season and now we are in the resolution season. One goal that we see year in and year out is that there are folks who decide they want to buy a home. This is a worthy goal to be sure and we encourage working towards achieving it.  But what we often see this time of year are many folks who aren't quite ready credit wise to obtain financing. I have written in prior posts about credit and how it affects your chances of being approved for a mortgage.  But many people don't understand that credit is not only about your credit cards and car payments, it is also about the things you didn't pay.  Just because the electric company has stopped sending you overdue notices, that doesn't mean they are done with you.  Often the bills that you didn't pay for one reason or another-you didn't have the money, the bill never reached you, you didn't agree with the balance-pop up when you least expect them-on your credit report when you are ready to buy a home.
  But you missed that cell phone payment five years ago! What's it doing coming back to haunt you now? You were certain it fallen into a black hole somewhere.  Here is a list of negative types of credit items and how long they can affect your credit scores:

-Late payments remain on your credit report for seven years

-Bankruptcies: Chapter 13 stays on the credit report for 7 years and a Chapter 7 is on for 10.

- Foreclosures-7 years

-Collections- Generally 7 years

-Public records-judgements, tax liens etc. 7 years-though Federal Tax liens can be on credit for a much longer period

  Once an item has been on your credit report for 5 years it does much less damage than one that has been on for five months.  However, judgements and tax liens will be required to be satisfied prior to extending mortgage credit.

  So since it is the first of the year, if you think that you would like to buy a home in 2014, and you think there might be some negative items on your credit report, now would be a good time to get those taken care of so you can move on the home you wish to buy a bit later in the spring. Nothing is worse than finding out that you can't buy the home you want because there are some old debts lurking on your credit report.