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6 Credit Report ‘Red Flags’ That Could Be Hurting You

Apr 18 2016

Heang and Sallie Ly of Arlington, VA, discovered an unusual situation when they applied for a home loan in 2014. Their lender could pull Heang’s credit report and see that he had an established credit history. But that wasn’t the case for Sallie. She’d never opened a credit card account. Or taken out a loan. There was really no record of any payments being made on her credit report, and that in itself can be a red flag to lenders evaluating you for a mortgage loan.

Luckily, in this case, Heang’s good credit was enough for the lender to qualify the couple. “But I’ve counseled my younger brothers to start opening credit card accounts and paying them off each month fully, so that doesn’t happen to them,” says Heang.

Lenders want to see a credit history, and on-time payments. They do not want to see bankruptcies, foreclosures, or late (or missed) payments. And there are situations in between, like not having a credit history or taking out a cash advance, that can spark lender anxiety.

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