My credit score is 718 but I was told I am not eligible for a loan how come?

Question

Hello everybody
My credit score is 718 based on equifax report. I am trying to buy a condo but the loan officer told me you are not eligible for anykind of loan because you have been here in US for only two years.he told that i should have three credit cards in addition to one that I had for two years. In addition I have a record of paying off a car loan which the loan officer said it is not that good because I have one late payment.
is what he said true?
I appreciate your responses beforehand.

Answer 1

Talk to other mortgage brokers. If you have any friends who have bought homes, ask who they used. Just because one loan officer at one place wouldn't consider you does not mean that you can't get a loan. Different lenders have different policies. Good luck!

Answer 2

The first thing, even though you have your score from Equifax, it still is not a true score. You should check myFico for your true scores.

A late payment does more harm to a persons scores than they realize. But, if you had a well rounded out credit file with a lot of good history - that single late wouldn't hurt you as bad as it is now.

I wouldn't dispute the late with the bureaus for the simple reason that if the account is paid and closed, you run the risk of losing the whole tradeline, which would drive your scores down. It would be a pretty major hit to your scores since you have such a thin file.

If you were only late once, and it was fairly recent, you might send a letter to the loan company and explain your circumstances why you were late (not that you didn't have the money, or forgot, they won't go for that) and request that they remove the late payment from your reports. Even though the account is closed, that is pretty much the safest way to go so you don't lose the tradeline.

It sounds like you don't have much history on your reports. That does make it hard to be approved for a major loan like a mortgage. If you know someone that will add you as an authorized user to their card(s), that will aid you as long as the card(s) have an excellent long history, no lates and is low with utilization.

If you are added as an AU, you should automatically receive the full history of the account. When you are added, request that the card(s) report on your reports. Your scores will not drop with the new tradelines since you won't have inquirys and the accounts are older established accounts. (they should start to report by the next billing period)

That should help you get not only the extra tradelines, but the history as well. Without the hits that you would take by applying and having new cards reporting.

If you don't know anyone that will add you, you will probably have to open several more credit cards. But doing that, you still won't have the history and your reports will take a hit for the inquirys and the new tradelines. Opening new accounts should be done at least 6 months before you try to apply for major credit like a mortgage.

You might open an account with a credit union and then check with them about a mortgage. Since they are member based, they are just a bit more lenient than a regular mortgage company or bank.

Answer 3

Could your citizenship be the issue? Having a high credit score and stable job won't replace a visa status. If you possess a passport from a country without extradition, a loan company may worry about you skipping out on the loan.
I think the multiple credit card part may not be accurate. Be very careful going into more debt to obtain a loan.
Speak to another loan officer, preferably one with an international company (ABN, Bank of America,etc..)

Answer 4

You have a loan officer that does not know his game. I am a broker of loans for over 12 years, finding money is not the issue getting it on the terms you want may be the issue. Your debt vs your income is a factor, time on the job, how much money you make, there are many factors. Check with a local broker not a bank!

Answer 5

I would follow his advice. Unfortunately, all banks have critera that all applicants must meet. They are similar around the board. But, you might be able to check around to other banks to see. I would get you a couple more credit cards. Keep balances very low and pay off every month. Save up your money for a large down payment. Most banks will take a chance on you if you are putting a large payment down first. Keep paying all your bills on time and in full. It may take you a little longer but just make the best of it.

Answer 6

There is no law that says a bank must loan you money regardless of your score. If they want to they will, or not.

I own my home free and clear have a score over 800 and I can not get a home equity loan to start a business because I would be leaving my long term employment. Too risky,

Answer 7

There needs to be an established history of debt and debt payment as well as a certain ratio between income and loan payment. I know people who have gotten loans with a lesser score but I think they had a good established history over years.

Answer 8

for mortgage purpose, lender will look 2 years of your employment history and your credit. in general to apply for mortgage you need 4 credit lines like credit cards, car loans e.t.c
that are 24 months old. your credit score is very good, but your loan officer was probably right about your credit age.
the only way to get the loan for you is to go with the program , that
will approve alternative credit like your car insurance payment, phone bill, gas, electric, cable bill e.t.c. if you qualify by your income for the mortgage you apply. if you need more help , contact me and i will try to help you.

Answer 9

Possibly your salary is not high enough to qualify for the mortgage, or your income to debt ratio is too high.

If those things are not the problem, I would use another mortgage company. Check with friends and family to find the best company to work with.

Answer 10

Read some credit loan and finance tips and articles on this site to help you with it