Consumers who have faced foreclosure or financial setbacks are in a position where their credit score has obviously taken a hit as we are seeing delinquencies increase and even late payments on credit cards rise, all of which can lead to lower credit scores for consumers, like those who may be potentially in a position to purchase a home in the near future or reenter the housing market after financial setbacks that led to foreclosure. Yet, there have been some reports that indicate mortgage lenders may now have more information when it comes to a consumer’s credit history, which may impact their credit score, the ability to borrow, or what types of rates they receive on certain kinds of financing, among other things, and this has obviously led to some consumers, like potential homebuyers, to seek out ways where they may be able to improve their credit score in order to buy a home in the future.
It’s no secret that homes that have been sitting empty on the housing market coupled with foreclosures have been detrimental to not only the economy but also the housing market specifically when it comes to home prices and devaluation. These reports that were recently released indicated that CoreLogic and Fair Isaac Corporation may be working to offer mortgage lenders more information, which may work to the advantage or disadvantage of future homeowners, as there may be more aspects of a consumer’s financial life included in these new credit scores or histories.
Yet, when it comes to consumers who are looking to either enter the housing market or reenter the housing market and potentially purchase a new home, there’s obviously a variety of factors that are in place as the housing market is looking at low rates and prices, and there are even reports that some lenders are offering more affordable incentives for new homebuyers, but again, higher closing costs that some homebuyers have seen, coupled with uncertainty in areas like the job market and housing market have created a great deal of hesitation on the part of some of these potential buyers.
While simply paying bills on time, working with their mortgage servicer to address any financial problems that may arise before foreclosure takes place, and keeping debt levels low are all aspects of a consumer’s financial life that can bode well for their credit score, when foreclosure takes place, missed payments arise as a result of economic problems and job troubles, or even health issues that could lead to consumers finding themselves in a difficult financial position in terms of honoring their debt, it can lead to a bad credit situation that needs to be addressed.
These common problems, coupled with new proposals to include more information for potential lenders could lead to some homebuyers both new and old finding that while their FICO score may not necessarily be impacted, but this could be a specific measurement used by lenders in the future and may require that more consumers address their financial problems in a variety of ways. While some homeowners who are facing the loss of their home are participating in short sale programs, as an example, which could be viewed in a favorable light, consumers may need to speak with credit counselors in order to get their financial life back in order, may need to work at lowering their debt, saving money, and simply building a better credit history, as there are many officials who feel that there are optimal buying conditions for some currently in place, but this does not necessarily mean that every potential homeowner will be able to qualify for these optimal rates as a result of their credit history.