Many people assume the passage of time always helps the credit score. However, about 30% of all mortgage applicants experience a score decline during the next calendar month due to information already in the credit report. Here are a few examples:
- Changing scorecards. Age of accounts is a key factor to determine the credit scorecard. This means that next month, all of the credit report data could be scored on a different scorecard.
- Aging information. The impact of data in the credit report can be based on how recently it occurred. Therefore, positive information aging can hurt.
- Recent mortgage and auto inquiries. While they may have already been listed in the credit report, these inquiries aren’t counted in scores until they’re more than 30 days old.
Since the passage of time can help or hurt a score, it’s crucial to simulate the timeframe that credit will be re-pulled when using CreditXpert® What-If Simulator™. That way you and your borrower can avoid surprises and plan ahead.