how is credit rating calculated? PA

[Bethy]

I live in PA. Hubby has poor credit (uner 500) and I have good credit (in the 700's). When we go for a mortgage, how will they figure out our credit score for mortgage rate? He is self-employed, I don't make much, but am debt free.

 

[libby976]

Credit Scores

lenders pull all 3 scores from both of your credit reports from the 3 bureaus. If your legally married it's a joint report.
EXPEr.
Trans
Equfax

they use the MID (Middle Score) to calculate everything. the high, middle, low thus middle score. whoever has the highest middle score they use and that person has to be the highest wage earner as well.

 

[Grandma's house]

True...but not all lenders use the middle score..most but not all. If your husband is the primary wage earner then your scores are meaningless going full doc. Sorry but true. We use to be able to do loans as a "no doc" using your score based off your credit with showing no income verification at all. Those loans are ALMOST gone. Most self employed people need "stated" income loans and those are fizzling out daily with all lenders. They do still exist but need a min. 700 score and you have it. We get memo's daily "another one bit the dust" yanking their stated income loans.

You say though, that HE is self employed? Don't YOU too own that business???

You are his wife are you not? You can own it jointly you know. I run into this with my husbands business all the time. He says it's his. So be it, but our tax returns show both of us do they not on yours?

You may be able to qualify without him all together IF you own that business too.

 

[Grandma's house]

How are scores factored you asked...many things create the score board.
1.) high balance credit cards to credit limit used is huge. Maxed out or over the top real bad.
2.) number of years rated without 30 day lates. (never be 30 days on your mtg. over the credit cards) many people when push comes to shove panic and figure it's best to pay all the credit cards (many of them) vs. ONE mortgage payment, thinking it's better to let the one mtg. payment get 30 days behind than 5 or 6 little credit card payments. WRONG!!!
3.) inquiries and recently opened tradelines are a hitter too.

Try doing in your name alone with a broker approved with ALL lenders. A letter from your CPA stating that you own the business too (ithat is of course if you do) will work.

 

[Bethy]

Hubby is self-employed - PA

First, we've only been married 4 months and hubby has been self-employed for almost 20 years, him being a sole proprietor so no, I'm not part of his business, although I have made his most recent business cards/magnets etc. We are both close to 50.

As for G'ma's house reply...we're in big doo-doo then. I have NEVER been late on a single payment, am debt free (incl. my house/car) but only make about 40k. Hubby has been late for years on everything (incl. a recent foreclosure mortgage which I didn't know about until 2 weeks ago and 'caught him up' on that and truck payment), has a 4k+ court judgement on him and a $760 lien on his house from a creditor. His score is 467! I didn't even know it could go that low. No, I was not aware of his financial situation until after the wedding which is a different story. We have to sell his house before looking for another, but when I found out his credit score, I panic'd a bit.

I know this sounds cold, but I hope this one piece of advice saves others from what I'm experiencing. GET A CREDIT REPORT ON BOTH parties before getting married - no surprises.

 

[Grandma's house]

First, we've only been married 4 months and hubby has been self-employed for almost 20 years, him being a sole proprietor so no, I'm not part of his business, although I have made his most recent business cards/magnets etc. We are both close to 50.

As for G'ma's house reply...we're in big doo-doo then. I have NEVER been late on a single payment, am debt free (incl. my house/car) but only make about 40k. Hubby has been late for years on everything (incl. a recent foreclosure mortgage which I didn't know about until 2 weeks ago and 'caught him up' on that and truck payment), has a 4k+ court judgement on him and a $760 lien on his house from a creditor. His score is 467! I didn't even know it could go that low. No, I was not aware of his financial situation until after the wedding which is a different story. We have to sell his house before looking for another, but when I found out his credit score, I panic'd a bit.

I know this sounds cold, but I hope this one piece of advice saves others from what I'm experiencing. GET A CREDIT REPORT ON BOTH parties before getting married - no surprises.

quote:I know this sounds cold, but I hope this one piece of advice saves others from what I'm experiencing. GET A CREDIT REPORT ON BOTH parties before getting married - no surprises

Not cold at ALL. (I wouldn't say this to someone openly in a million years, but since YOU brought it up and all) When you marry...you are merging as a company merges. Now you know why so many people do not marry. His foreclosure, judgements, liens ALL would follow into the new home you would buy if you could. However you cannot. You could poss. pull off getting one and even financing into your name alone IF you found a dishonest mtg. broker to simply put on the application that you were NOT married. I had friends come to me with the same scenario not too long ago. I refused to do it. They got the house and it already has liens on it now. Eventually it catches up. The creditors he owes do a lien search when they get the new address and find WIFEY on title and still slam the liens on there anyway. So what IS the point??
I've seen people divorce over this. They almost have to. IF you don't mind my asking...how long did you even know this guy before you got married? How do you NOT notice things like collection bills, no credit cards, likely not even a checking acct.either because once he has j.l.'s they will seize that too. What was it? A quick trip to Vegas?

 

[Bethy]

14 months

we knew each other 14 mths beforehand. I didn't see any of the liens etc. He had his place, I had mine. My main only "selfish" request in finding someone (and I told him this too) was someone who was self sufficient $$ wise. He has a mid-priced townhouse w/ the older child always asking to "borrow" money, had a position in the community as well as volunteered at the same place a friend of mine did. His own kids didn't know his financial situation. I think he was hoping to get caught up, just didn't make it (and is a self-admitted procrastinator on his own things). The only money I had saved for myself (my child is separate) went to catching him up. I took out a 5k loan w/ my work to maintain bills while he going thru this "dry" spell this past month. I can't afford any more. If he can't pay after this month, oh well, it goes to foreclosure....maybe I should have let it be done by now and it'd be behind us.