Home Construction loans and my credit report

[Anonymous]

Hi-Im hoping for a bit of feedback. I'm hoping to apply for a construction loan sometime with the next year. My credit score is> 700, my income is good and my on time payments are considered exceptional....according to Experian. However, although my debt to income ratio is good now, it has not always been this way. I have carried a pretty high percentage for quite a while. So, my question is this........How much can a lender see within my history? Can they only see current debt/income ratio or will they have the ability to see these ratios as far back as they want? Will they know my credit card balance on a specific card.........say, three years ago? Will they be able to see what my running balances were throughout the history of the credit card or will they only see current balance as compared to credit limit? I have been told that the credit reports we as consumers see on the 3 big credit reporting sites are not the same reports a lender sees.  Is this true? My credit is good but I'm still climbing out of the hole caused by credit card spending!

Im particularly interested in comments from actual lenders. But, I would love to also hear from others who may be in the same positron.

Thanks all-

[CoSprings99]

Utilization has no history or memory. You arent penalized for what your utilization used to be. It is only a snapshot of that moment in time. Now, they can see your highest balance, but in my experience this isn't looked at. I have put very large work IT purchases on a card before and none of my multiple mortgages have said anything about very large "high balances" since my utilization once I apply for a mortgage is near zero.

[Anonymous]

Hi-Thanks for you response. Question, when you say they can see high balance are you referring to anything currently with a balance or can they see the history of high balances? Just curious.

Thanks again-

[Anonymous]

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@Anonymous wrote:
Hi-Thanks for you response. Question, when you say they can see high balance are you referring to anything currently with a balance or can they see the history of high balances? Just curious.

Thanks again-

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They can see to what extent you have used your credit limits.  Basically the highest balance you've ever had on an account.

[Anonymous]

Hmm......Ok, can they see how long I maintained high balances or just how high a balance was at any given time. Basically, my credit cards have been maxed out for extended periods of time and I’m trying to discern as to whether or not this will be a detriment to me and my loan application.

Thanks for the insight.

[Anonymous]

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@Anonymous wrote:
Hmm......Ok, can they see how long I maintained high balances or just how high a balance was at any given time. Basically, my credit cards have been maxed out for extended periods of time and I’m trying to discern as to whether or not this will be a detriment to me and my loan application.

Thanks for the insight.

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Have you ever looked at your credit report?

[iv]

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@Anonymous wrote:
Hmm......Ok, can they see how long I maintained high balances or just how high a balance was at any given time.

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Yes. They can see the last 24-30 months of balance history on almost all accounts, in addition to the "High Balance" field.

Pull your annualcreditreport.com reports to see the data available.

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@Anonymous wrote:
Basically, my credit cards have been maxed out for extended periods of time and I’m trying to discern as to whether or not this will be a detriment to me and my loan application.

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Nope.  Past balances will not affect your loan application.  Only current balances.

Keep in mind, though, that ALL current debt matters for a mortgage loan, even if it doesn't appear on your credit reports.  You'll be asked to provide information on all debts, and sign that you've provided complete and accurate information.

[Anonymous]

Hi-
Yes, I check my credit report on a regular basis.

[Anonymous]

Hi IV-
Thanks for your response. I worry that with my high balance history that an underwriter may look at past debt load even though there will be very little at time of application and assume I may charge cards up again and then not be able to handle loan payments......Is this an irrational fear? As I stated in original post my bill payment history is perfect and stated as being exceptional on Experian's website. Thanks-

[iv]

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@Anonymous wrote:
Hi IV-
Thanks for your response. I worry that with my high balance history that an underwriter may look at past debt load even though there will be very little at time of application and assume I may charge cards up again and then not be able to handle loan payments......Is this an irrational fear? As I stated in original post my bill payment history is perfect and stated as being exceptional on Experian's website. Thanks-

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Don't worry about that, it's a non-issue.  (Assuming the debt is really GONE, and not just moved to non-reporting accounts; and doesn't appear to be related to any 1099 self-employment cashflow.)

Good scores? Good current DTI? No derogatory info? All other paperwork in order? No problems.

You are putting WAY more thought into this part of the process right now than the UW will.