Mortgage Matters

Wesley Knight 0:00
This is a Kun V studios original program. The content of this program does not reflect the views or opinions of 91.5 jazz and more the University of Nevada, Las Vegas, or the Board of Regents of the Nevada System of Higher Education.

Roland Daniels 0:43
Good morning Las Vegas. Welcome to mortgage matters. I'm your host. Roland Daniels, a certified mortgage advisor with Geneva financial my NMLS number is 355859, Geneva's company, NMLS number is 42056, and I'm here this morning, as always, with my co host. Heidi Griffith, good morning. Heidi,

Heidi Griffith 1:06
Well, hello there. Roland, how are you this morning?

Roland Daniels 1:08
I am doing wonderful. Happy

Heidi Griffith 1:10
Sunday. Happy

Roland Daniels 1:11
Sunday.

Heidi Griffith 1:12
I am. Heidi Griffith, I'm also a mortgage advisor and your Director of Client Services with Geneva financial. My NMLS number is 224, 775, four. And

Roland Daniels 1:23
today, we have an important topic that affects so many people, which is credit and we're going to talk about how credit scores impact your ability to buy a home, how to improve it, and how it all ties into your home ownership journey. It is a big one, and we're excited to help you understand it better. Yeah, I

Heidi Griffith 1:46
think that this is a great topic and and be informed as you tune in this morning that this isn't going to be just for people who have less than great credit. This is this is going to be some great tips. We've got some good notes here about stuff we want to talk about for everyone you know, on how to improve your credit, on how to utilize your cards the best way you can, how to read your credit report. I mean, there's a lot of great information in this. This isn't strictly if you have bad, bad credit, this is what you're going to do right, of course. And so before we get talking about credit this morning, we want to let you know about our two most recent upcoming classes. They're both in regards to down payment assistance, and they will both include your home buyer education certificate, which you'll need for the down payment assistance. The first one is going to be with the Nevada housing division. That's a class that we typically hold once or twice a month, and that's going to be on Friday, November 15, it'll be from 11 to noon, and lunch will be provided. And then on Monday, November 18, this is a new one, and we are really excited about this one. This is going to be held alongside Nevada Rural Housing. Actually, we met with Kevin Hickey. It was, I don't know, three or four weeks ago here on the radio. He is an amazing guy. And actually, Nevada Rural has some great programs, including the MCC the mortgage credit certificate, right? They do. So we're putting together a workshop that's going to be on, like I said, November 18. That's a Monday from 11 to 12, and that's going to be at the Whitney library. This is going to go over rural down payment assistance. However, the interesting thing about that we learned that when we spoke with Kevin was rural doesn't just mean big, wide, open spaces. It doesn't mean Pahrump or Northern Nevada or Indian Springs or Mesquite, because there's pockets of rural areas right here in Clark County, right? That

Roland Daniels 3:51
is correct. So we do have a few pockets, like Heidi said, that it's available, and we will cover this in the class. So yeah,

Heidi Griffith 3:58
so you can utilize rural Down Payment Assistance right here in Clark County. So that's pretty interesting. So if you have any questions about either one of those classes, or even if you want to register, you can give us a call or text us. We are at 702-210-2057, again, that number is 702-210-2057

Roland Daniels 4:20
so just like Heidi said, both of the classes will cover down payment assistance programs that are available, and you'll receive your home buyer education certificate, usually, what, within 24

Heidi Griffith 4:32
hours? Actually, it's been less than that. We have been trying to get those certificates out, you know, within the 10 hours after the class, or whatever. It goes pretty quick, okay?

Roland Daniels 4:41
And the Nevada Rural Housing class will also highlight, like we spoke of the different areas right here in Clark County, like Whitney that are eligible for their DPA programs or down payment assistance. And it is a fantastic chance to learn and get all of your questions. Answered and take the important step towards home ownership, that's

Heidi Griffith 5:05
right. And the the library that that class is actually going to be held at Whitney library is in Whitney. It's the it's a township, right? It is. And does that qualify for Nevada, rural? It does. It does. So, yeah, so if you're familiar with that area, Whitney, it is actually eligible for Nevada Rural so if you're interested, make sure you grab a pen mark your calendar, and these classes are going to be packed with valuable information that's going to help you move forward. So let's talk about today's show and talk about credit. Let's do this right? So did you know that a lot of your common bills that you have, they're not reported, right? You need to take action to ensure that your credit report reports the stuff you wanted to report and reflects your true financial responsibility, right? Of course. So let's talk about that for a minute. Why does it matter? Why does credit matter? So when we talk about credit, the number one thing is you gotta take you've gotta take action and pay attention to your report. You need to pay attention to your score. You need to know where you're at so that you can either improve or, you know, just kind of make your credit better. Don't you agree?

Roland Daniels 6:15
I agree. We should all be trying to improve our credit on a monthly basis, or at least a yearly basis.

Heidi Griffith 6:22
So when we say you got to check your credit and you've got to know what's in your credit report, how do we do that?

Roland Daniels 6:30
And to do that, we go to annual credit report.com and it is crucial to review your full credit reports from all three bureaus, such as Experian, Equifax and TransUnion, you're allowed to pull it at least once a year, but sometimes, depending on if there's hacks or breaches, breaches from different companies, sometimes they will give you access on a weekly basis. Yeah,

Heidi Griffith 6:55
more than not, actually. So it's usually more frequent than once a year, but legally, they've got to give it to you once a year. Yes, right.

Roland Daniels 7:03
So we advise you to pull maybe one score every three months.

Heidi Griffith 7:08
And that's great. And so you get, you get access to all three reports. And something I like to mention is because when you go on that site, not I check mine frequently. When you go on, you put in all of your information, it's going to ask you for your social you need your social security number for that, and then it will give you the first report. And that could be Experian Equifax, TransUnion. Once you go through that report and check it, and you're probably either going to want to print or save that to your computer, right? You want to download the report, and then you can, you can actually, we'll give you a check box, and you'll actually be able to move on to the next report, because you want to check all three, because all three will be slightly different. Yes, right?

Roland Daniels 7:50
All the different companies report differently, differently to the three credit bureaus, and that's because they have to pay to report, that's

Heidi Griffith 8:01
it. So sometimes you could have, you know, a much lower score on one on one Bureau's report and have a higher score on another, and or there may be just information missing from one credit report that's on another. So you want to go through all three of those with a fine tooth comb. You really do. And what about credit scores? Where do you get those?

Roland Daniels 8:22
So credit scores? A lot of times, borrowers will come to me and say, well, we use Credit Karma, credit sesame or our own credit card account, right? But to understand, when you're looking at a Credit Karma or credit sesame, they're going to give you what's called Vantage scores, not FICO scores, but Vantage scores. Vantage scores were created by the three bureaus, but when it comes to mortgages, we don't use Vantage scores, and at least not right now, maybe in the future they've been talking about, they're doing some kind of hybrid form of credit score models.

Heidi Griffith 9:00
And I think the goal for that, I think the goal is actually a good goal. It's gonna, you know, it's gonna be interesting to see how it washes out. But the goal would be so that the consumer has a better overview of their score. And it's not different everywhere, because credit scores right now, you know whether you're looking at Credit Karma, if you're looking at what, wherever you get your credit score, and then you go somewhere else. They're not going to be apples to apples identical. Kind of like, I don't know, you go on your scale at home, and then you go to the doctor and get on a scale, and then you go to the gym and get on a scale, and all three numbers are different. Now, obviously, when we're talking about that, we want our scale weight to be the lowest. So wherever it's the lowest, that's a skill we like the best, right? And with the scoring models, we obviously want the highest score. But in all actuality, all different people who pull your credit report, they're using different models. So we use, we use a try merge, right? A try merge. Tell me what a tri merge credit

Roland Daniels 9:56
report. So when it comes to a try merge credit report, we're pulling. In all three scores and three reports from the three bureaus, then we take the middle score for the entire application,

Heidi Griffith 10:08
okay? And so what if there's two people, there's two buyers on the application, and you you have your middle score is, let's call it, I don't know, 720 and my middle score is a 610, what score Are you going to use?

Roland Daniels 10:22
Unfortunately, for the application, we have to use that 610 Oh,

Heidi Griffith 10:26
well, I better get my credit up. Then that's right. So, and what about auto dealerships? Do they use the same

Roland Daniels 10:33
kind of report? So they do? They have their own scoring models when it comes to auto scores. Okay, so they're not the same the same models. So the fico.com or the Fair Isaac Corporation, it's a billion dollar corporation, and they design different FICO scoring models for every industry, such as mortgages, auto loans, even department store credit cards compared to regular credit cards. It's crazy. It

Heidi Griffith 11:02
is crazy. It is crazy. And so you're going to want to make sure that you have a good ballpark, because that's what it is when you're pulling your scores online, right? That's a good ballpark, you know, kind of where you fall. And even more important than your score is what's in your credit report. And if we've got time, we'll go into that pretty deep today too, right? We will

Roland Daniels 11:22
and but as a reminder, we recommend using experian.com to pull your FICO score from Experian, and it's going to be probably the closest free consumer credit FICO score that you can utilize, and it'll give you a great idea when it comes to mortgage scores, right,

Heidi Griffith 11:44
right? So if you think that your score is, whatever you think your score is, let's just say you think your score is 700 it's going to fluctuate in all of those areas we talked about, when you're looking at getting a mortgage, when you're thinking about purchasing a home and using a mortgage, experian.com will probably be your closest, right? We usually see, what is it like? A 20 point difference?

Roland Daniels 12:06
Probably a 20 point difference one way or another. Yeah, but, but it's going to be the closest that you're going to get without actually pulling your true mortgage. FICO scores, I agree, but, but don't discount Credit Karma, credit sesame, they are great for monitoring your credit and make sure there aren't any new accounts that pop up that you don't recognize, or maybe you haven't really applied for those types of credit. I

Heidi Griffith 12:33
agree. And you know another tip, and I follow this one pretty religiously, because I utilize all of these scores, these scoring models, they'll alert you if something weird has changed. They sure will read the alerts. Yes, you know, we're overwhelmed with emails and stuff like that, and usually they'll either, you know, send a message to your phone or email. You make sure you check those out, because a lot of times it's going to be stuff that's trying to sell. You don't buy all the stuff that you're, you know, being sold. But if there's an alert that there's been a data breach or the dark web, or all of that kind of stuff, that kind of stuff's important, right?

Roland Daniels 13:11
Yes, you do need to pay attention. I

Heidi Griffith 13:13
agree. I agree. So let's talk about, I know we've talked about utilization a lot, if you haven't tuned in previous utilization is how much credit you're using and how much credit you have total, right? But when we talk about utilization, I know you talk about this all the time. Roland, what's that magic number for utilization?

Roland Daniels 13:34
So the industry is saying 30% for utilization, right? So what does that mean? Let's say I have one credit card with a balance or a credit limit of $1,000 I multiply that by 30% so that means my credit utilization at 30% should be no more than $300 that I'm using for that particular account,

Heidi Griffith 13:58
right? And so you've got, let's just call it. You've got four cards, and you want to get your utilization right, okay? And you maybe use your Wells Fargo card all of the time. You don't you, and I'm just pulling names out of my out of my hat right now. You use the Wells Fargo card all of the time, and you never use your Chase Card. And so your Wells Fargo card is at 50% utilization, and your 60% utilization and your Chase Card is at zero. If that's at 60 and at zero you're at 30% is that optimal?

Roland Daniels 14:32
That is not optimal. We want to keep all of your credit cards at 30% or below to get the best juice for your credit scores. Yeah. So

Heidi Griffith 14:43
credit juice is important. So is it going to hurt your credit maybe not. But is it going to give you the best like Roland said, credit juice is that going to make? Is that going to make your score improve just a little bit more? Probably not, if you, if you're looking at doing that, if. You're trying to achieve the best credit score you can get. That's a great tip. So how do we do that? So I only use my and, like I said, Wells Fargo it's just a name I came up with. Right now, I only use my Wells Fargo card. I never use my Chase Card. Would it be more advantageous for me to keep my balance lower on my Wells Fargo card, and if I needed to use another card, use my Chase. Or can I just make sure that I'm just paying that Wells Fargo card down to the under 30% does it make a difference? Not

Roland Daniels 15:30
really, long as you keep it at 30% or below, so maybe you're at a 50% ratio after you made all of your charges for the month of groceries, gas and whatever those other expenses are. But maybe you get your bill in the mail and you can make a payment earlier than your due date before they receive

Heidi Griffith 15:50
great one. This is a great one, so let's talk about that for a second. So your creditors typically report to the bureaus once a month, once a month. Typically, they don't always right, because I know that my apple card doesn't report every month, right? So knowing when they report is important, and they don't pay

Roland Daniels 16:12
attention something to remember when it comes to, like Credit Karma and credit sesame that we all pay attention to. You know, sometimes they'll say, Well, my credit score change, but they're giving you a change every week. It's not happening every week. No, it only happens once a month, once a month, because those trade lines or those creditors have to pay to report to each of those bureaus, and

Heidi Griffith 16:33
that's why sometimes they're not on all on all reports, because maybe I'm a smaller company than a big company, right? And it's more expensive, and I'm like, Well, I'm only going to report to Trans Union because they're the cheapest, or they've given me the deal for the year, right? Right? So keep that in mind, but let's talk about that. So your credit, your credit card, or your creditor, only reports once a month, if that. But the end, they typically report at the same time. Not everyone reports at the same time. They typically. One individual creditor typically reports at the same time, right? So let's just say that your creditor reports on the sixth of the month, and your bills not due until the eighth, eighth of the month. So if it's not due till the eighth, and they report it on the sixth that means that I'm losing out on that month's payment, right? I'm not getting that credit juice on that month's payment. It will kind of roll over to the next month, right? Yeah,

Roland Daniels 17:32
so you have to wait 30 days for the next reporting cycle for it to show that payment. So

Heidi Griffith 17:38
what happens if I pay my credit card earlier than the due date in front of when they report, so if they report on the sixth, what if I pay my my credit card on the fourth the same amount that I would have paid on the due date on you know, what happens? Will I get that credit juice?

Roland Daniels 17:57
I think so you will get that credit juice. So, and there's different strategies or different ways to make those payments. So let's say you have a minimum payment of $50 I know some people will split it in half. You know, they'll pay the first week of the the month for $25 and then another $25 on the due date, right? For that particular credit card, it's a smart

Heidi Griffith 18:23
strategy, right? Of course, especially if you're you're not paying any extra, and it is a great way to budget, especially if you're paid bi weekly, or weekly, or whatever that looks like, right? So you can actually budget that out and space it out, and that will actually help, because why? Why does that help you're

Roland Daniels 18:40
making more payments, and the credit card company gets to see your credit behavior. It's all about how you behave with that credit. They want to know how you're taking care of it. How are you making those monthly payments, keeping that credit utilization under 30% so it's all about your behavior, right? So

Heidi Griffith 19:01
if you could just pick up a few little tips, it's going to give you that credit juice to increase your score a little

Roland Daniels 19:08
bit. These are all tips that are are being utilized to increase your FICO score. We all want our scores to hit that that unicorn number of 850, that's right, which I've only seen three times in my 18 year career,

Heidi Griffith 19:23
right? And I've only, I've only seen it about the same. So how do we find out when the creditor reports?

Roland Daniels 19:31
You need to call your credit card company, or that particular company who's reporting on a monthly basis, right?

Heidi Griffith 19:37
So if I call Wells Fargo again, I'm just using them today. If I call them on the phone and say, Hey, I just want to know when you report, they'll tell me. Sometimes

Roland Daniels 19:46
they will, sometimes they won't. So it's hit and miss, whether it's credit card company a, credit card company B, right? Some are willing to share the information. Some are not. I

Heidi Griffith 19:57
agree. I agree, but that those are great. Little tips that cost you nothing. You don't have to do anything out of the ordinary, just little things that you can do that will beef it up a little bit credit juice, right?

Roland Daniels 20:10
Yes. And then, if you want to play around with it, maybe they won't tell you. Then make a payment like at the first of the month, and then make another payment around the 10th and see how it reports when that next billing cycle comes around, yep,

Heidi Griffith 20:22
yep. That'll be really interesting to watch. If I were you and I do this as well, is I kind of keep track of I have a calendar that I keep track of when I pay all of my bills and when they're due. I make sure that I personally have all of my bills on automatic payment for the minimum amount due just the minimum amount, because I have an idea of what I'm going to pay on each bill every month. Then I make the additional payment as well. But I do that automatic payment so that I make sure that if I have a bad week or something happens or I forget, yeah, it's being paid because we don't want to forget to pay our bill, because what's the biggest chunk of your credit

Roland Daniels 21:06
making sure you're paying your bills on time? 35% payment history.

Heidi Griffith 21:11
Payment History. 35% of your credit score is based strictly on making sure that you pay your bills on time, and pay that on time. So let's talk about that really quickly. So we're gonna assume that everybody's out there doing the right thing and paying their bills on the time. But life happens. Life happens. I mean, stuff happens. We see it all the time. Sick, you're injured, you know, you're laid off, whatever that looks like in your life. Life happens. And sometimes we have to miss something, yes,

Roland Daniels 21:39
and sometimes that 30 day late will pop up on your credit report.

Heidi Griffith 21:44
And yeah, and what does that do to your credit report?

Roland Daniels 21:47
Unfortunately, just 130 day late can affect your credit anywhere from 60 to 140 points. It's not depending on what your your FICO score was at the time, right,

Heidi Griffith 22:00
right? And actually, the higher your score, the more it seems to impact it. And seeing right, so you

Roland Daniels 22:05
can destroy your 780 FICO score with just 130 day late. You

Heidi Griffith 22:10
can do that. But what if, you know, this was a one off event, something happened. I mean, there's, you know, people pass and our you know, sometimes things are more important than that one credit card bill, and we get that

Roland Daniels 22:24
Yes, right? Or we made that that payment, and we put it in the mail and it never made it to that creditor, right? You put

Heidi Griffith 22:31
your bill still in the mail,

Roland Daniels 22:32
you know, sometimes,

Heidi Griffith 22:33
or you forget to hit send, or whatever that looks like, the phone rings and you walk away from the I mean, there's just a million different reasons. And, you know, there's all kinds of stuff that can happen in life, but if you're currently always on time with your bills, you miss one, you can reach out to your creditor, right?

Roland Daniels 22:51
You can reach out and ask or send them a goodwill letter, yep.

Heidi Griffith 22:56
Especially, I mean, when you've built your credit, especially if you've really worked hard to build your credit, and then one of those life moments happens. This is going to be a big deal to you. You don't want to see that that drop in your credit. You can reach out to your credit card company or creditor and explain the facts. You can either do this by mail. You can call them on the phone and talk to a representative. I usually like to have everything in writing, don't you? You?

Roland Daniels 23:24
I would agree with you. But for that one off, you can give them a call, but maybe they say no, or maybe you try to escalate it to a supervisor and they say no, then we recommend sending that goodwill letter and explain the circumstances, what took place, yeah, explain

Heidi Griffith 23:40
everything you know, and if it were something that you have documentation for, whether it be, you know, I hate to say this, but a path, you know, someone passed, or you were out of work because of medical reason, and you could produce either a doctor's letter from your doctor, because they fill them out all the time, whatever that looks like and you've been in good standing. Now, if you're you know continually late on your bills, they're gonna toss your letter in file. But

Roland Daniels 24:09
if you only been there late just one time, and they'll be able to look through and find out how long you've been a customer of theirs. And if you've ever been late, and most of the time, if you've never been late, they will give you that opportunity. And there's a possibility that they could remove that 30 day late. I agree.

Heidi Griffith 24:29
I agree. And it happens more times than not. You've just got to ask, yes, you've just all human Absolutely. So let's talk really quickly about once you look at your credit report and you see some discrepancies on your credit report, something that's not supposed to be there, it happens quite often, doesn't it? It

Roland Daniels 24:50
happens all the time. Probably over 80% of all credit reports have an error. And is that's why it's very important to. So look at your credit reports on an annual basis to make sure that there aren't any errors that you recognize what's on that credit

Heidi Griffith 25:07
report. And so what do you do when you find those errors? If

Roland Daniels 25:11
it were me, I would mark those errors and then fill out a letter and send it to all three of the bureaus stating that there is an error on my report, and you have to do it in writing, right? Because

Heidi Griffith 25:26
you can do that online. You can you can fill that out online. We suggest for stuff like this, especially when it's in regard to your credit, that everything kind of is in writing. Don't you agree? I agree. And same thing goes for if this is a good one for the in writing, I have a collection on my account. Yes, it's something that's been sitting back there, and I'm trying to improve my credit. And maybe I don't have all of the money to pay that collection off, right? Is there a way that, without paying all of that, I can have it removed from my credit report? There

Roland Daniels 26:10
is definitely a possibility. So I would give them a call and see if you can negotiate in what's called for a pay for deletion. Okay, okay, so let's say I have a collection of 500 bucks, and I offer them say, 150 or $200 so if I pay the 150 or $200 will you be willing to remove it from the credit report?

Heidi Griffith 26:34
And if they say, Yeah, I'll be willing to remove it from the credit report, can you please send me that money? I'll give you,

Roland Daniels 26:42
yeah, just, just send me the money. Just send me the money.

Heidi Griffith 26:45
So, um, what should you do before you send them to money? You

Roland Daniels 26:49
want to request everything to be in writing, right? So it's called a pay for deletion letter, and once you have that agreement, then they can send you a copy, whether it's through the mail or an email stating that, yes, once they receive payment, they will remove this collection from your credit report. Yeah, and it just

Heidi Griffith 27:08
depends on the creditor, whether or not they send the email or they send the letter. A lot of the bigger creditors have to send a letter. They won't do it via email. But remember, don't pay anything until you get that. And also remember, if you've made an agreement with the creditor and you've been able to settle it for a lot less than what was originally on the debt, make sure you actually uphold your end of the bargain and you pay it, because if you don't, that agreement goes away, right? And that stays on your credit, and it could actually possibly hurt you if you don't pay it right? Because now you've been in communication with them and started a new whole cycle. Yes,

Roland Daniels 27:44
so you just want to reach out, right? You

Heidi Griffith 27:49
can call us. We actually have HUD, certified counselors that will work with you on credit matters. There's free resources always available. So you know, I'm not going to try and dig anybody on credit repair companies and those kind of things. But if you can work this out on your own for $0 it really is a good option. Don't you think we

Roland Daniels 28:12
will always recommend that you do things on your own, and we have the resources that will teach you how to do this all

Heidi Griffith 28:20
on your own, absolutely well, it's been a quick 30 minutes, huh? It has

Roland Daniels 28:24
been, well, it looks like that's all we have time this morning. And we hope that you found our credit discussion helpful. Remember understanding your credit is key to unlocking your home ownership dreams. It

Heidi Griffith 28:40
is, it is. And if you're thinking about getting into a home or making you know any refinancing moves you want to remember we're here to guide you every step of the way. You can reach out anytime to discuss your options.

Roland Daniels 28:52
And don't forget our upcoming classes on Friday, November the 15th and Monday, November the 18th. And if you would like to register for any of our upcoming classes or have any questions, you can call or text us at 702-210-2057 that's 702-210-2057 so make sure you tune in next Sunday at 7:30am right here on K, U, N, V, 91.5, for more insights into making your mortgage work for you. So until then, have a fantastic Sunday and remember, stay true to your dreams. Stay true to yourself and your mind. Bye. You.