Our Dirty Little Secrets : A Soft Pull Credit Report, WHAT is it and WHY should I care?
Have you ever thought about how important something as simple as a soft pull credit report can be? First, let me explain the purpose of this report. Lenders will typically pull the report 24 to 48 hours before the loan closes to make sure the borrower has not gone out and made any new purchases so, we are looking for inquiries that might affect our borrowers debt ratio.
When my processor comes to my office with a soft pulled report in her hand, my first thought is ...what did they go out and buy? A car? a refrigerator ? maybe a washer and dryer? They all think that is a must now that they are going to be homeowners right?
Well, no, none of the above ...how about a brand new… collection!! Now that is something that gets my heart racing.
When there is a brand new collection on a soft pull report the file has to come out of the closing department a new credit report has to be pulled to see how much this collection has affected their credit score. At this point, we are just trying to stay calm.
Now the file must be run through the automated system again, get the approval, and in this case, the file must be sent back to RD. RD has to reissue a new commitment for this loan, and now, it is put back into the closing department. This loan could have easily been denied.
As agents and borrowers, your main concern at this point is when are we closing? My main concern is, is it closing!
Homebuyers are so excited during this time that I think they just don’t understand or pay attention when I stress not to let anything happen to their credit during this process. Don’t go buy anything, don’t let anyone pull your credit for any reason, and please don’t let anyone get to the point they post a collection on your report.
This loan closed on time last month and nobody knew what it took to get it there. Was that your closing? That’s our little secret.
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