Credit is one of the primary measures mortgage lenders use when it comes to purchasing a home. While there may be some variations between lenders, good credit is essential when it comes to buying a house. In a perfect world buyers would all come to the realtor with pre-approvals that have verified assets, credit and income, and buyers would come to lenders with credit reports that are accurate and clean.
Unfortunately in the real world borrowers, for the most part, do not understand enough about their credit. This prevents them from taking appropriate measures to maximize their chances of getting a loan with the best available terms. With the recent high levels of unemployment and high rates of foreclosures, credit issues among borrowers is more critical than ever before.
Considerations When Recommending a Credit Repair Service
Which brings the question, should professionals be recommending credit repair services? The biggest challenge with the credit services industry is that they do not have a great reputation for being effective. As an industry, credit repair services have high levels of complaints with the BBB. Making such a recommendation, could reflect badly on the Realtor or lender, if they client pays for a credit repair service and in the end does not feel like their score reflects the cost of the service.
The other issue is that credit repair services are often time consuming. In our fast paced world, where we want instant gratification and instant solutions, the 30, 60 and often 90 day turn around for credit repair services is lengthy. The home buying process generally takes 30 to 45 days to complete.
Working with clients that have credit issues is more time consuming and frequently they are purchasing less expensive homes. This makes the market niche less lucrative than the higher end housing market. On the plus side, there is a great need for assistance in this market, and there are fewer Realtors and lenders fighting for these clients.
If this is a market niche you wanted to pursue it would be highly recommended to build a relationship with a reputable credit repair service. This will allow the lender or Realtor to make the recommendation with confidence that the repair service would be able to produce results that would help the buyer qualify for a loan and in the end purchase a house.
What Credit Repair Services Can Do
It is also important to note that credit repair services are not magicians. They cannot magically make bad credit go away. They understand the credit system and can work within those rules to ensure the credit report is accurate. They can dispute claims and through potential loopholes, can sometimes remove derogatory credit even when it is accurate.
The truth is that many buyers do not have the time and energy necessary to go through the complicated process of improving their credit score. As a result, they would rather pay a company who knows the ins and outs of the system, rather than trudge through it themselves. For this reason credit repair companies are thriving.
Millions of consumers have seen their credit scores plummet from job losses, home depreciation and other economic factors. For this reason, finding buyers with 700 plus credit scores is more difficult than ever.
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