Your credit score is one of the biggest factors in determining your qualification and interest rate when applying for a home loan. Missing a credit card payment is not the end of the world and it will not automatically prevent you from being able to qualify for the purchase of a home, but the event will negatively impact your credit score.
Best Case Scenario:
If you are lucky, the lender will not report the late to the three credit bureaus. An account is not late until the account is over 30 days late and a payment made within the 30 days may have some late penalties, but will not negatively impact on your credit. If the payment is has not been made in 30 days, your lender is within their rights to report the late to the three credit bureaus. Just because you’re late however, does not mean that they will report it. The larger creditors have analytical models that analyze payment history of their customers and sometimes if you have been making on-time payments for a long time, it is possible that they might not report the late.
Worse Case Scenario:
If your lender does report a late payment to the credit bureaus it will take anywhere between 60-90 days to impact your credit, and when it does it can cause up to a 110 point decrease on your credit score depending on your total payment history. Unfortunately, the higher your score before the late, the more likely that your score will suffer a greater loss. Over time your score will improve with positive payment history. Search this blog for tips on how to remove derogatory items from your credit report without paying a credit repair company.
“Chad, it was a pleasure working with you. Your loan was smooth, speedy, and we were kept well informed. I will make sure to prioritize offers where you are the loan officer as I know they run smoothly.”
An ‘A’ Team!
We just closed on our second transaction with the Chad Baker team. They are very well organized and I can attest that they are looking out for their clients’ best needs. A special shout-out for Juliann B. who was our guide through the painful loan process. We found Juliann to be very responsive, kind, patient, and diligent in getting both our refis closed well.”
I was referred to Chad by my Realtor for a purchase of a new house. The experience with Chad and the team (I mainly worked with Juliann) was nothing short of outstanding. From start to finish there were always quick to respond and when needed, notify me of any new documentation that was required. There were very helpful explaining to me the pros and cons of different financing options as well as some other loan related issues, such as termite clearance outside the purchase contact and septic tank certification process. Overall, very knowledgeable and processional team. Loan preapproval was done in a single day and loan documents were ready for signing in 21 days, which was 9 days ahead of schedule. That never happened to me before.