Closing on a house in 7 days and credit score dropped 60 points

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Closing on a house in 7 days and credit score dropped 60 points

Edita D.
Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes

Hey guys,
we are about to close on the house, and we just found out our credit score dropped 60 points, so now we have a delinquent payment of 60$ reported to credit bureaus. (We did not receive a paper statement from the credit card company, so missed the payment).
Would this affect the closing? Would now our interest rate be higher?

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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
13y

60 point drop for 1 late payment. I am skeptical. I bet there is more to the drop than you are telling us or that you even understand. Did you run up more Credit card debt buying things for your new house? Yes it is comon for this to happen and screw up closing.

I agree with Andrew Garner that you should contact the creditor ASAP.

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  • Andrew Garner
    Accountant · Gilbert, AZ · Member since 2012 · 13 posts · 0 votes
    13y

    It is very possible it could effect your closing. They typically pull your credit one last time the day of close (at least that is what my mortgage broker did). I would make the payment ASAP and contact the credit card company and ask them to remove the deliquency especially if you have never missed a payment before. Your interest rate could go up or you could lose the house entirely depending on how low your credit score went. Hopefully, an actualy mortgage broker can give you a little more insight.

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    13y

    60 point drop for 1 late payment. I am skeptical. I bet there is more to the drop than you are telling us or that you even understand. Did you run up more Credit card debt buying things for your new house? Yes it is comon for this to happen and screw up closing.

    I agree with Andrew Garner that you should contact the creditor ASAP.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    Depends on what type of loan you are going after and the threshold. Say the rate was for 620- 680 and you dropped to 620 then maybe (who knows) it might not matter.

    If you were getting an excellent rate based on a very high credit score then likely it will affect you as they are very picky giving out the best loan rates with stringent standards.

    Not getting a paper statement to make a payment you still should be able to call them and check online. If someone has perfect credit they usually keep negative reporting in house if just a few weeks late and do not report (not always) a late payment until you are getting over 1 month behind.

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  • Lynn McGeein
    Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    13y

    Not only may your interest rate be higher, but they might not give you the loan at all if you don't meet minimum credit score requirements now. Like others have said, they will check your credit again a few days before closing. I agree with Andrew, ask the credit card company to please remove that delinquency as it is stopping you from closing on your home. If it's one late payment in a long history of on-time payments, they should do it for you. But not receiving a statement is no excuse for not paying it on time unless you've had a zero balance for months and this was a charge for an annual fee on a card you never use. In that case, it should be easy for them to agree to help you out.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    There are credit break points, such as 750 and 720, that have a significant effect on your creditworthiness. If the drop crosses over one of these points, yes, it might affect your interest rate or even your ability to get the loan. A drop from 725 to 665 might well turn an approval into a denial. And, yes, the lender will pull your credit immediately before the closing.

    I'm with Joel Owens. As far as I can tell, a late payment will only hit your credit report if its more than 30 days late. Even one day will affect your interest rate, but it takes 30 days to get reported. Not getting a paper statement is no excuse, especially if you're trying to close a loan. Unfortunately, its water under the bridge. If you've not been late before, you can try talking to the creditor and see if they can fix it. But if its already hit your credit report it may be too late. You really have to keep on top of credit cards and make absolutely certain the payments are getting made on time.

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  • Edita D.
    OP
    Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes
    13y

    Thanks guys. This was a credit card for oil change and auto care that we have not used in 6 months. Of course, no excuses, I should have been carefully reading when online I was being offered to sign up for paperless statements and opting OUT of it... An oil change in March that we did not pay on time- here we go with our loan in jeopardy!
    Anyways, thanks for your input. Will start calling right now.
    P.S. NEVER been late on any payments, by the way, however this one slipped through...

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  • Account Closed
    Involved In Real Estate · Los Angeles, CA · Member since 2013 · 110 posts · 4 votes
    13y

    Something similar happened to me last year. I had leased a new car about a month before my offer was accepted. When the bank pulled my credit, it showed my OLD lease which gave me a low DTI. I kept telling them that I got a new car but they would only look at what showed. Well.. 10 days before closing they pull my credit report again and my new car lease popped up, considerably raising my DTI.
    The bank then told me the only way they'd give me the loan is if I put down 15% instead of 10%! (And extra 25k!) I had no choice and did so, which helped in the long run.

    When the bank pulled my credit report the 2nd time my credit score dropped a tad, but only 5 points. Not sure why yours dropped a whole 60 points. That's a HUGE drop for a late payment of only $60.00. Most of the companies I have my credit cards with won't report late payments until 60 days of delinquency.

    This will probably change the parameters of your loan and interest rate, unfortunately. If you can get a statement that proves you settled your account you might be able to send that to the lender.

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  • David Beard
    Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
    13y

    Are both spouses on the offending credit card account? Sometimes my wife will pick up these accounts while shopping or getting tires, just in her name. She's not employed, and on one of my property purchases, her score had taken a hit for an identical reason as yours, and they wouldn't close unless I removed her from the loan (she did go on the deed).

    Also, are you seeing your score from a true credit bureau? Or is it from a freebie site like Credit Karma? These sites can be off a fair amount.

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  • Edita D.
    OP
    Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes
    13y

    We got an account change alert from CreditKarma yesterday.

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  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    13y

    Credit Karma doesn't use a REAL credit score, just their own algorithm.

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  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    13y

    Could you call the credit card company and tell them what happened and offer to pay on the condition that you dispute the late payment with the credit bureau and the credit card company agrees not to respond to the dispute? My understanding is that if you dispute something on your credit report, it goes away if the party doesn't respond.

    Of course, this might not get wrapped up in seven days. You could write a letter to the underwriter explaining that this was an oversight and it's only $60 and you're paying it.

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  • Edita D.
    OP
    Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes
    13y

    Rob K That's exactly what I did. They are taking care of this. We'll see what happens...

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  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    13y

    I can't believe you Americans don't use direct debits. You should never need a statement to make your payment, make sure it is automatically paid off every month!

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  • Nayan Boahene
    Member since 2018 · 1 post · 0 votes
    8y

    did u get your home???

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