May we pull your credit??

Discussion in 'Credit Talk' started by Momof3, Jun 14, 2001.

  1. Momof3

    Momof3 Well-Known Member

    Well today was the day that I called all the services I needed switched or had to order. I spoke with the electric company first and they explained they do require a deposit ranging from this amount to that, UNLESS I would let them check my credit. Well mortgage is complete so I said sure by all means check it, she said please hold and then returned and said okay your deposit fee is waived. It felt kinda good not to have to think about that, of course had I got it in hubby's name depending on who they pulled, I might have been hesitant, darn EQ:(
  2. NanaC

    NanaC Well-Known Member

    Doesn't it make it all seem so real???
  3. Nave

    Nave Well-Known Member

    That stuff always makes me grind my teeth. Like you may be some elaborate electricity thief using 3 months of electricity and moving from town to town or switching from 1 electric company to another evading the bill.

    I mean if they hook you up, and you don't pay, they cut you off and you can't get it turned on at that address until you pay. Seems simple to me. Why the need for credit check. Unless you have bad history with that company in the past (I mean how many electric companies can you choose in one area) and then they get a deposit, treat you as high risk. They get re-connect fees anyway.

    Credit checks from electric companies. Sheeeesh.

  4. NanaC

    NanaC Well-Known Member

    That's a good point,Nave!
  5. Hope

    Hope Well-Known Member

    Hi Mom,

    I don't want to be a stick in the mud, but as a Realtor I want to warn you that your mortgage lender will pull ONE MORE credit report on you either the day before or the day of your closing.

    Most people don't know this, but it's general procedure. They want to make sure that you haven't gone out and charged furniture, a new car, drapes, etc. taking on new debt that would affect your ability to pay them back.

    And yes, they will take one last hard look at your credit score at closing.

    One couple I represented (despite my warnings) went out and bought a new car just before their closing. The dealer assured them that because this was a "make no payments until January" that their mortgage wouldn't be effected. Wrong! The inquiry and credit committment were entered on their report like lightning and the lender sent them home from the closing in tears!!!

    On other occassions, the buyers got caught up in just running "what-if" scenarios on lines of credit for furniture and such for their new house. Bang! Each furniture company (Haverty's, Ethan Allen, Gabbert's, etc.) pull a hard inquiry. By the time the buyers got to the closing, their credit score was below the limit to close the loan. Even without actually buying any furniture. More tears as the buyers had to scramble to get back into their apartment for 6 more months.

    My own story, after I had a contract on my home, my car decided to give up the ghost. It would cost more in repairs than it was actually worth at that point, but I knew I couldn't take that big credit score hit and buy another right then.

    So I rented for over a month. Yes, it was very expensive and I scrambled for cash every week to pay off the credit card to keep it going.

    In the long run, it was cheaper because I earned it back in the points and interest I paid on the mortgage in the first year. Also, I wrote off the car rental as a business expense (after all I am a Realtor).

    So please, please, keep the lid on any more inquiries until you have the keys in your hand!!!!

    Sorry to ramble, but I can't tell you how many times it's broken my heart to watch the realization come over my client's faces of they ignorantly jeopardized their home purchase! So, so sad. I put put one girl up in my own house for 2 weeks because she'd already given up her apartment and had nowhere to go immediately.
  6. Momof3

    Momof3 Well-Known Member

    Thanks, I am aware that they"may" pull another report, they don't always depends on the underwriting system etc, I have seen what can happen, a friend refinanced their car days before closing you guessed multiple inquiries but they got the loan but it wasn't pretty, and I have seen others not have their scores pulled anymore it just depends. But unfortunately I needed electric service and didn't want to fork over a deposit and also since husband had lower of the 2 middle scores I just got it in my name just to be on the safe side:)

    But rest assured I am not applying for anything NOW or in the immediate future, I have worked too hard to get this house, but thanks again for the warning b/c you never know what could happen.
  7. NanaC

    NanaC Well-Known Member

    Yes, surely they expect standard credit reports for situations such as utilities and homeowners ins. How can anybody even consider doing the car purchase thing in the interim until they close?? My gosh, I freak over homeowners ins. and somebody actually applied for a car??? I can't even fathom it. And, I'm proud to use the word fathom today...:) School's out here...brain is officially turned off for the summer repairs!
  8. Hope

    Hope Well-Known Member

    Thanks Mom and Nana. I can tell from having read you two's postings that you're on top of the game.

    I just wanted to lend a little something of my "expertise" in this area.

    Yes, Nana, I've known people who've bought cars (one girl bought a brand new BMW!! It was glossy black, beautiful and shoved her debt/income "ratios" into the basement right there at the closing table.

    She was shocked.

    Another couple innocently charged thousands of dollars in new furniture for their first ever home. You know what happened...again at the closing table.

    Seen folks charge a vacation to take right after the closing to "reward" themselves. Pow! There went the reserve cash.

    One guy bailed his neighbor out of jail using 2 of his credit card. He expected to be reimbursed probably was...but no before it showed up on his credit report as maxed out and Slam!

    First thing I tell my potential clients when they walk into my office is "Don't incur another dollar of debt from this day until the minute AFTER you close."

    I'm so paranoid about that that I go over these same examples I shared here. Because somehow, somewhere in the back of their minds they sitting there thinking "...but she doesn't mean the bass boat we *need* to buy before the sale's over."

    Anyway, I'm proud of you both and I just feel that tingling sensation when you sign the last document and they say, "Congratulations. You're a homeowner!"
  9. Momof3

    Momof3 Well-Known Member

    Yes Hope I have read and heard about so many of these things happening it isn't even funny. People must realize until they signed on the dotted lines a that then and only then is it final. I couldn't imagine buying a car, house full of furniture or maxing out to take that celebration cruise.

    I remember reading a while back about a couple that was trying to reach a certain score for 100% financing, their LENDER advised them to tranfer some balances off smaller cards and close them out, OMG they basically threw their ratios to hell and needless to say they didn't get 100% financing I would have dumped that lender after that advice.

    I spoke to my lender about all this and all the potentials during the whole process. We went through desktop underwriting which gave our approval which is good for up to 120 days. He said they "probably" won't run another report but unless we maxed out our cards, bought a new BMW or had any judgements against us magically appear and hadn't lost our jobs we are good to go, but then again I won't feel we are good to go until I get my keys:)
  10. Hope

    Hope Well-Known Member

  11. judyputy

    judyputy Well-Known Member


    My neice just bought a home and they did pull her score again right before closing. The bank called all excited about all the inquiries and she explained that she had to turn on the gas, electric, water, etc. She just had to write a letter for them and they calmed right down. They have to expect you will turn on the electric!!

    Now a new car is something else indeed!
  12. Hope

    Hope Well-Known Member

    Ha! I bet that was a disturbing moment for your niece!

    You'd think lenders would be used to the flurry of inquiries just before closing for utilities and such.

    But, in their defense, since Utilities generally don't report to CRAs unless you default and cause a charge-oof or judgement, the average back office clerk doesn't recognize all those utility names and has little to compare it to.

    For instance, how many times have we read someone's question here saying they have an inquiry on their report they don't recognize, then it turns out to be a "legitimate" creditor?

    Would you recognize TXU23 CR to be an abbreviation of the parent company of the local electric company in North Texas? Neither do most of us because we've never seen it before.

    Anyway...the stories I could tell!!
  13. NanaC

    NanaC Well-Known Member

    It's really crazy!! Though I think I'm going to wait. My daughter's lender pulled a CR after they closed, too for a total of 3!

    On that note, my daughters got an offer on their house today!! That's good news for them...Only took 2 weeks in CO...real estate is incredible here.
  14. Momof3

    Momof3 Well-Known Member

    Goodness gracious, pulling after you close, what would they do take the house from you??????

    I am happy she got an offer on her home!
  15. NanaC

    NanaC Well-Known Member

    Thanks, in CO, they offer what you want or more..they got their listing's appreciated 18,000 in ONE year!!!

    Here's a note: I called AT&T (BLAH!) to inquire about telephone service in El Paso, they said they needed a credit report but it would be a soft inquiry... much do I believe them? Didn't pull so I don't know...I'm not crazy about AT&T at all.
  16. Hope

    Hope Well-Known Member

    Congrats to your daughter. That's always a relief off the mind.

    Yep, lenders have been know to occassionally (not very often) pull a credit report after the closing to search for anything you may have been hiding that hits the CR after the closing.

    And, yep, if you look at the documents carefully, it always states that if you've obtained this loan under false pretenses, or deliberately mistated or ommitted significant financial information, that the loan is immediately "accelerated". In other word it becomes "due and payable in full" at once.

    It's known as "calling the loan".

    But, this is quite rare.
  17. bbauer

    bbauer Banned

    Well, I admit that I am as green as a gourd and as dumb as a fencepost, but I simply fail to see why anyone would order utilities or anything else for a house they didn't own. I guess that's because it don't make any logical sense to me to put anything at all into a house I didn't own. I'd be too fearful that something would go wrong at the last moment and then I would have put myself in a mess. I just wouldn't even consider doing it.

    Under what circumstances might one wish to order the stuff for someone else's house? It would be interesting to see what the logic might be for doing so.

    I think your posts on this subject are great because a "newbie" to house buying is going to get a lot of good information from the experiences presented here.

    I think it especially important that a "newbie" come to the understanding of how damaging the purchase of some new item or drastic change in one's credit position might be to his ability to get his home loan approved. I think that lots of folks wouldn't stop to think about that if they had not seen it for themselves here.
  18. NanaC

    NanaC Well-Known Member

    The idea is to have the electricity, water, gas, etc working when you move so you can see where you are putting the furniture so you don't stub your toes. I don't think any of us are putting the utilities in our names while others are still living in it....but I don't want to sit in a house with no running water or electricty for a week or two because I didn't think ahead to have it scheduled appropriately.
  19. bbauer

    bbauer Banned

    Thanks for your reply.

    Well, if it was going to take a week or two to get the utilities in, I guess I might feel the same way. It was a situation I had not imagined or thought about at all because I've never run into a situation where the utilities were not turned on within a day or two at the most except when we get some of those tornadoes we get here in Oklahoma and the crews are so busy they simply couldn't make it any sooner.

    I think it did take a bit longer for my wife to get her gas turned on this fall in her beauty shop, but that may be a different situation, being a business. She just used a couple of electric heaters till they got there. No big deal.

    Thanks for your reply
  20. judyputy

    judyputy Well-Known Member

    Heat is one thing Bill, but no potty is totally unacceptable when moving in.

    No lights is a no-no too. Here you can wait up to a week to get in your turn for service. We always call ahead!

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