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Financial
Apr 1, 2015

Small Mistakes Can Make A Huge Impact On Credit Scores

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

A credit score is one of the most important factors that a lender considers when evaluating a person’s options for financing. Credit scores are so important that the difference between a good one and a bad one can be substantial, not only in terms of savings but also in terms of the obstacles a person faces when obtaining a loan.

Of course this isn’t news to anyone with experience shopping for a home. What I found surprising recently was the amount that a client’s credit score jumped after clearing away a negative report from a creditor.

My client was trying to decide whether to stay in her current home and refinance or purchase a new home. After accepting my offer to provide insight into her situation, my client stopped by for a meeting, sat down and said she was confident her credit score was in the high 700s.

“Well, then there’s a lot we can do,” I said. “If you want to refinance we should be able to save you quite a bit every month. Or if you want to find something new, we could get you something really nice with a credit score like that.”

My client filled out a credit application and departed cheerfully. After promising to provide a quick response, I ran her credit and found that a medical provider had reported her name to a collection agency, effectively bringing her score down to a less-than-ideal 640.

“Oh, that must have been after I had my daughter,” said my client over the phone. “The doctor had a problem working something out with the insurance company. It was all a big mistake. I explained this to them repeatedly but they obviously didn’t understand. Ergh, what do you need from me to fix this?”

“Just have them send a letter to the credit bureaus stating the mistake wasn’t your fault, and copy me on it, and we should be good to go,” I replied.

A week passed and still no word from my client. Then she called with the following:  “Sorry it’s taken a while, I’ve been very busy. I talked to the doctor and the collection agency; anyway, I got this sorted and you’ll be getting a letter soon. Sorry, it only took a few phone calls to get it done.”

“No problem,” I replied. “I’ll let you know something when I get the letter.”

It was great to see what happened when the credit bureaus got the news. “Hey, when that letter went through your credit score immediately jumped to an 815!”

“What? That’s awesome,” said my client excitedly. “Thanks Patrick! I know there aren’t many brokers out there with the knowledge or experience to identify a positive solution for something like that. Hopefully next time will be easier!”

Helping people succeed financially is what makes my job so rewarding. For a free consultation about your financial position or your ability to move into a dream home, contact me and I’ll be happy to go over things with you.

Patrick Stoy has 16 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.

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