Are you giving clients correct information about credit reports?

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05/27/2015 | Author: Editorial Staff

One of the best pieces of advice you probably share with clients and prospects is to monitor their credit reports … but are you giving them accurate information? See if you can answer these questions about finding and interpreting info from credit-reporting agencies.

1. True or false? Information about your checking and savings accounts is included on your credit report.

2. Which of the following appears on a credit report?
            a. Identifying information (name, address, Social Security number)
            b. Credit inquiries from the last two years
            c. Bankruptcies, liens, and judgments
            d. Payment history
            e. All of the above

3. True or false? A credit report doesn’t include the consumer’s credit score.

4. How often can a consumer order a free copy of his or her credit report?
            a. Once every two years from each of the three reporting agencies
            b. Once a year from each of the three reporting agencies
            c. Once a year from one of the reporting agencies
            d. Only lenders can request a copy of a consumer’s credit report.

5. True or false? If a consumer orders a credit report for himself, it will negatively affect his or her credit score.


1. False.
2. e. This and other information appears on a consumer’s credit report, although each credit-reporting agency displays this information in a different way.
3. True. A free credit report doesn’t include a credit score, but a consumer can purchase a score from the credit-reporting agencies and scoring companies.
4. b. Consumers can order a free credit report from each of the three reporting companies once every 12 months at
5. False.

Categories: Buyers, Sellers, Homeowners
Tags: credit report, quiz, consumers


Craig Nicholas on 07/13/2015

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Rick DeVoss on 05/28/2015

I don’t have a mathematical answer for you, Denise, but it has to do with the fact that there are many different formulas used to calculate a credit score, and not even the Big Three use the same formula.  There are “FICO scores”, “Beacon scores”, “Vantage scores”, “Merged scores”, and probably many more.  It is simply all relative, and the only way that any two people can talk about ‘credit scores’ is to be using the same system at the same time.

But this is not important for Realtors.  What is important is that you not just tell every buyer to call a loan officer and have them run his credit report.  Because if his score IS marginal, running the report will lower his score by at least two points, and that is not helping him one bit.  My opinion is that we have the responsibility to consult with a buyer first, and send him to the loan officer only after we conclude that his score is healthy enough to stand the scrutiny.  I also think we should instruct a buyer on how the system works first, and then let them decide what to tell the loan officer when they apply for the loan.  (If they just borrowed $2000 from a friend, should they use it for the down payment or to pay their rent & groceries…?)

Every Realtor should learn as much as possible about credit scores and credit reports, and we need to have more MCE courses on these topics.

Denise Askea on 05/28/2015

When looking at credit scores, whether from credit karma, or provided by credit card or other companies with whom you have an account,  it has been my experience that these scores do not match with the credit scores pulled by a lender.  They are FICO scores and reflect the credit reporting agency, but when the lender pulls the credit scores they, more often than put, do not match.  I have asked why they differ (sometimes as much as 30 points) and so far no one,  including loan officers, have been able to explain it…..

If anyone can explain why this happens, I would be very interested…..

CA on 05/28/2015

I would never advise a client to do something that I don’t try myself first, so I took the bait and tried the credit karma stuff.  True to it’s word, it is free. They don’t try to upsell you into something else, and offer great advice on the factors affecting your score and how to improve them.  My bank now puts the fico score on my account when I pay my credit card bill, and the credit karma score has not been more than 1 point (if not an exact match) throughout the year I’ve been checking.  While the annual credit report site is ok, waiting a year, and not receiving any advice is a waste of time.  I suggest the credit karma site to all my clients that “aren’t sure” where their credit stands.  No, this is not an advertisement for any site, and I receive NOTHING from any site for suggesting them.

Rick DeVoss on 05/28/2015

Question 2a may not be 100% correct, as most companies will redact all but the last four digits of the Social Security number.  This prevents identity theft.

4b)  If you are advising someone how to monitor their credit report for ‘free’ on a regular basis, you should tell them to pull just one credit bureau’s report every 4 months.  By rotating them, you can keep a constant eye on any changes on your report.  And if you really want to see what is happening to your score, you will need to pay the site a small fee to get the score along with the report.  (Most of us are score oriented.)  Once a customer has their score up sufficiently, then you can send them to apply with a loan officer.

The only time an Agent doesn’t need to follow this procedure is when the buyer tells you that his score is over 640.  (And even then, there could be issues.)

Ward Lowe on 05/27/2015

Nathan: You’re right. The question has been corrected.

Nathan Dennis on 05/27/2015

Question 4 failed to include the word “free”. Although it should have.

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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

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