FHA Guidelines: Credit Reports
Credit Reports
Credit reports that are submitted with each loan application should have all of the information available at the credit bureaus.
In addition to having all of the information that the credit bureaus has, the borrwer who is going to be responsible for the new mortgage must have all of the information available on the credit report pertaining to:
- credit
- residence history
- public records information
One credit report is required for each borrower and a joint credit report can be obtained for a married couple.
Traditional Credit Reports
The two types of credit reports that are considered to be “traditional” credit reports are what is known as a “tri-merge” and a residential mortgage credit report.
When getting an FHA loan, the minimum credit report is the tri-merge.
Non Traditional Credit Reports
A non traditional mortgage credit report is designed to access the credit history of a borrower without the types of trade references normally appearing on a traditional credit report and is used as a substitute for the traditional credit report.
A non traditional credit report cannot be used to:
- enhance the credit history of a borrower with a poor payment record
- manufacture a credit report for a borrower without verifiable credit history
- offset derogatory references on the borrower’s traditional credit report (for example, collections or judgements)
Credit Report Retention
Lenders must retain all copies of all credit reports and document in writing the resons for any discrepancies between the credit reports as well as reconcile inconsistencies if the lender receives any information that is not consistent with information on the credit report.