Are Credit Counselors a good thing?
I worked with a client last week that was interested in one of our home listings. They informed me that they had some credit issues in the past, but were working through those, and both had good steady jobs. I suggested a couple of loan officers that could get them approved for a home loan and to let me know the amount of the pre-approval.
A few days later, my client calls me and reports that he was turned down for the home loan approval. I was expecting to hear that his credit score killed them and he tells me that it is 650. Not being a Louisville loan officer, I am thinking that this is not too bad and there is more to the story, and there was! A few months back, they had hired a “credit counselor”. They would give the counselor XX dollars a month and the counselor would pay their bills in the way that would best bring up their credit score.
Now here is the rub, the Louisville, KY mortgage officer looked at the fact that they had hired a credit counselor in a negative light. The reasoning is that the couple must not be responsible if they have to hire someone to pay their bills. To say my client was unhappy, was an understatement.
Here is the amazing thing, this couple had cash in the bank and thought that they were doing the best that they could to raise their credit score. Their plan was to pay off the “credit counselor” that day and take over their day to day affairs. Hopefully in 2 or 3 months, they can buy a house in Old Louisville.
If you have any questions about your mortgage payments, check out our mortgage calculator at The Hollinden Team in Louisville, KY.