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  • Have you seen the advertising by one of the big credit bureau’s on how you can boost your credit score. Sounds great, but it appears it isn’t going to help anyone get a mortgage loan.

    Experian recently create an offer where you can self-report trade lines, such as utilized, cell phone, etc, to “boost” your credit score. As a mortgage lender, we are now seeing these reports come through, so we wanted to share with you how Fannie Mae and Freddie Mac deal with theses self reported trade lines, and how lenders will handle them.

    One giant area of confusion is that there are many different types of credit reports. On your MORTGAGE credit report, which is different than the credit report you get from Credit Karma, your credit card company, and even directly from the credit bureau, lenders will see that the Trade line indicates at the top it is self-reported, and under remarks, it confirms it is a utility or cell phone.

    We will also notice that these trade lines are only recognized and reported by Experian. Per Fannie Mae and Freddie Mac Guidelines, Loan Officers and Undwerwriters will need to check the credit report to indicate that it is Version 2 of Experian’s boost report.

    In this case it is confirmed that it is Version 2, which means that while these are self-reported, they are NOT affecting the calculation of the MORTGAGE credit score.  Lenders will also not have to include these self-reported payments into a borrowers qualifying income, but I can see that becoming an issue as when lenders pull in your credit report to our software, it automatically pulls in all your debt. Eagle eyed Loan Officers and Underwriters are NOT currently used to looking for that.

    The bottom line is while credit boost may work for some other creditors and situations, it will NOT help anyone get a home loan.