First of all, thank you dear readers for being patient with me this week. I’ve been in Atlanta for my sweet granddad’s funeral. Instead of writing about mortgages I’ve been hugging aunts, wrangling nephews, reminiscing with cousins and eating home cooked food prepared by my granddad’s Sunday school class. Can we all together give a collective sigh of thanksgiving?

I’m back home in Houston now, glad for the time I had with my family, and am somewhat recovered from the initial blast of hot soggy air that hit me when I stepped off the plane back in H-town.

In the midst of unpacking and cleaning and getting caught up on writing and such, I wanted to fill you all in on something that happened in the office recently. If you saw my sooner vs. later chart, you may have noticed a small snippet about getting pre-approved.

About six months ago, a nice man contacted Chad and inquired about getting a mortgage. We’re going to call him Theodore so that I don’t have to keep typing “the man”. I do realize Theodore requires more key strokes, but I am trying to really suck you into the story, and calling him Theodore helps me.

Theodore planned to buy a house in about six months (which would be now, since this started six months ago), but wanted to get all his ducks in a row first. Chad suggested Theodore get pre-approved for a home loan in order to get a clear picture of what he could afford, what type of interest rate he’d be looking at, etc. The reason getting pre-approved is important is because that’s when the ole Bosses pull a client’s credit report. And your credit score impacts your interest rate. That’s not the ole Bosses rule, that’s just the rule. I’m not really sure whose rule it is to be honest with you, but I know Chad and James have to follow it and not ask any questions.

Anyway, Theodore didn’t want his credit pulled yet. He said he was pretty sure his credit was great, and there was no point in pulling it before he was ready to buy a house. Chad obliged because he is a very nice mortgage banker.

But ah HA! Guess what happened! Now, six months later, Theodore is ready to buy a house. Chad pulled his credit and found a measly $88 overdue medical bill from four years ago. You know what that measly unpaid, forgotten $88 did to the man’s credit? Tanked it, I tell you. Okay, I don’t know that it tanked it, but I do know that it lowered his credit enough to impact the mortgage. And now, because the man wants to buy a house soon, he is paying 1/8 of a percentage higher interest rate than if he had great credit.

But here’s the thing. If Theodore would’ve given the green light to have his credit pulled six months ago, Chad would have had time to help him resolve the credit problem (not by any crooked measures, but smart measures like having Mr. Theo pay the bill), thus potentially raising his credit score and securing him the better rate.

Next week we’ll discuss the steps folks can take to increase their credit once it’s damaged, but for now my point is sometimes it’s best to have your credit pulled a few months before you plan to buy a house.

If you’d like to know more about how much house you can afford and what your credit looks like, e-mail my ole Bosses. They love it when readers contact them.

Okay folks, back to unpacking. And in case any of those precious octogenarians from the Guiding Light Sunday school class in Snellville, Georgia are reading this, thank you thank you for the food. I so enjoyed that vegan chili.

Chad is having a hard time.  The rest of the team has encouraged him to “go talk to someone,” but he just won’t listen.

Here’s the thing…Chad thinks he’s still the Boss of me.  But he’s not, see?  He’s the ole Boss and I am free to sass and take charge and turn down orders now.  His most recent mishap occurred last week when he sent me three super boring articles on credit reports and told me there was some good info there if I wanted to write about it. 

Let’s get something straight…unless Glamour Magazine is covering credit reports, I ain’t reading about them.  Instead, I pulled Chad in for an interview.

You’re Not My Boss:  Credit Reporting and Skinny Mirrors

An Interview with the ole Boss, Chad Helmcamp

Just the Assistant:  First thing’s first…where is my coffee?

Ole Boss Chad:  Um, well ah…

JA:  Oh nevermind.  Listen, I overheard a conversation in the office last week in which a client was wondering why the credit we pulled for them gave us a different score than the score they had from the free places.  What gives?

Ole Boss:  There are different types of credit reports:  Consumer Reports, the most common being the Vantage Score; and FICO scores, which are what we pull.  And those different types of credit reports have different ranges of scores.  They use different scales.

JA:  What’s the difference?

Ole Boss:  Honestly, I think the consumer sites like to make people feel a bit better about themselves.

JA:  Like a skinny mirror?  My best friend has a skinny mirror and I love checking myself out in it when I come over.

Ole Boss:  Exactly like a skinny mirror.  They have a larger scale so even if you have very average credit, the number is higher than the number you’d get from FICO.

JA:  So should people even check those free scores?

Ole Boss:  Absolutely.  I encourage people to check every four months, since you get a free report from each of the three agencies per year.  I’d check each one once a year, spread out over the year. 

The main thing to look at on those reports is where you rank compared to the average American.  That lets you know if you have average or good credit.  Also, you need to look at the actual report to see if some crazy assistant might have stolen your identity and racked up a huge Anthropologie bill or something.

JA:  What’s your credit like?

Ole Boss:  Off the charts.  Ha ha.  I don’t know…I haven’t checked in a long time.

JA:  What?!

 [Note:  At this point Chad got quite dodgy with me.   Hmmm…]

Ole Boss:  Uh, what’s the next question?

JA:  What do people really need to know about credit scores?

Ole Boss:  Pay your bills.  Paying your bills on time makes up 35% of your credit score.  And, don’t max out your credit card.  30% of your credit score comes from the amount of debt you have compared to the amount of credit available to you.

[Note:  Chad rambled on quite a while here..you might want to take a break and get a snack before reading on.]

JA:  Oh yeah?  That’s fascinating…

Ole Boss:  Also, it’s not always a good idea to close out a credit card once you pay it off, because 15% of your score is based on the length of your credit history.  It can help you to leave the card open.

JA:  Assuming you’re not a nutcase with a thousand open cards right?

Ole Boss:  Right.  Also, your score depends on how often you apply for new credit.

JA:  Ah yes, Ole Boss Chad.  That reminds me of a recent client who was a bit nervous about having his credit pulled, thinking it would drop his score.

Ole Boss:  If you are applying for new credit all the time, then yes, having even more credit pulled hurts your score.  But if you apply for credit just a few times a year, then having credit pulled for a mortgage should not have a big negative impact on your scores.  Either way, you have to have credit pulled in order to obtain a mortgage.

Christina? 

 JA:  Huh!?  Oh, hey, anything else you want to tell people?

Ole Boss Chad:  Yes!  Tell people they can come talk to me and we will discuss all their questions. 

Just the Assistant:   Sounds great (ole) Boss.  Now go answer all those phone calls!

Well, er…

They didn’t report me to the credit agencies.

2009 Scores: 743 734 766

Today’s Scores:  793 796 770

My plan was to reveal some really crappy scores today and we’d all have a good laugh about how I’m a financial disaster.  But now what am I suppose to do? I could buy my own spaceship with these scores they’re so good!

Here are some possibilities on why it didn’t get reported.  Boss Chad said that my servicing bank probably has its own in-house collection people.  As soon as they got in touch with me, I explained that it was a mistake, and I fixed it immediately.  While still on the phone with the person, I went onto the bank’s website and paid up on both past bills.

My own theory is that I was super nice with the bank people (I cannot say the same concerning collection man; I was horrid to him).  When I called the bank to find out what had went wrong with my account, I kept in mind that it was not the fault of the lady answering the call.  She, personally, did not jack up my account, and I treated her well.  Chad didn’t necessarily think this was why I didn’t get reported, but maybe it helped?

Chad also said, concerning mortgages, they just eventually start foreclosure proceedings instead of reporting you to collection agencies.  And it got me thinking, this is different from if you don’t pay your Nordstrom bill.  With a Nordstrom card, it’s not like they’re going to come to your house and rip those Jimmy Choos right off your feet.  But they still need their money from you.  Hence, reporting you to the credit agency makes sense in that case.

But your servicing bank actually could get a house back if you don’t pay your bills.  Obviously for me it didn’t happen after two missed payments, but I’m certainly never going to test the waters again!  And yes, I now have reactivated the automatic withdrawal feature, plus I double-check it each month.  And no, I don’t own any Jimmy Choos.

Here’s to not getting foreclosed upon!

There is something very important about me that you all need to know in order for this relationship to work. 

I am in love.

With a magazine.

Once a month, my Glamour magazine comes in the mail, and for the week afterward, every conversation I have with other humans will involve something I learned in Glamour. 

“You want to have lunch, you say?  That sounds great because Glamour magazine just told me how to order at a restaurant and take control and own my plate of food and I’d love to go to lunch!”

“You want me to stuff those envelopes for you?  Of course I will – and did you notice I am dressed even better than most assistants because Glamour magazine said that’s what power women do and I might even be president one day?”

Well, yesterday was the day.  Currently I’m halfway through and I already know what skirt is best for my shape (they always encourage short gals to dress a little more risqué to look more grown up), plus I’ve been warned not to be a cyber bully.  The cyber bully article was all about these people who’ve had their life ruined because people told them they’re worthless on MySpace.

And it made me wonder, do the Bosses go home at night and cry in the dark with heavy metal music playing because their assistant’s blog post made fun of them?  What if Rachelle cuts all her hair off because I said it was big on the Internet?  What if they all write dark poetry about me?

Am I a cyber bully?

I quickly flipped the page to next article.  They asked all these women “What’s your financial secret?” and all these ladies confessed to hiding new dresses from their husbands in the dog food bag and pawning off grandma’s jewelry to pay the Nordstrom card, and it said in bold “EVERYBODY has one!”  And I thought, “Well that’s just not true Glamour magazine because I don’t have a financial secret.  I’m responsi –

Uh Oh.

I forgot about that one thing.

I missed two mortgage payments last year. 

I know, I know.  Fingers in ears, “Lalalalalala I can’t hear you!” 

Here’s the thing.  I’ve always used the automatic withdrawal feature because I know good and well I won’t remember to make payments.  Well, last November I kept getting scary answering machine messages from this man saying he had an important business matter to discuss with me. 

Let’s get something straight buddy, I’m just the assistant.  Nobody has important business matters to discuss with me.  But I finally called the number back, you know, just waiting on them to sell me something so I can say “Ah HAH!  You’re a SCAM!”

But that’s not what happened.  He was a collection agency man.  A very angry collection agency man.

Collection Agency.  For me, the one who works at the mortgage bank.  Turns out a few months prior I had been clicking around on my servicing bank website, and I happened to click the random very important button that stops the automatic withdrawals.  It’s so tricky!  At any given moment throughout the work day I have a business-ish website open, plus a clothing website open.  I can view the thumbnails of ten dresses and decide which ones I like in the time it takes for business websites to turn to the next boring page.  And only sometimes do I get mixed up and click the wrong thing.  

And my servicing bank was so unhelpful and apparently “We’re sure it was an honest mistake and you thought you were buying a new top and no we won’t remove the charges if you send us chocolates.”  Hmph.

So here’s what I’d like to find out.  How did that affect my credit score?  And because the Bosses have done all my own home loans, I happened to have my credit score from my last loan right here!  In March 2009, my three credit scores were:

743

734

766

Since then, other than the two missed mortgage payments, I’ve paid all my bills on time, and haven’t taken out any other loans.  My plan is to ask the Bosses to pull my credit again tomorrow and analyze the results.  I’ll report back to you all as soon as I find out the scoop. 

In the meantime, I’m going to go onto cyber-bullies anonymous and get some tools for making amends with that collection agency man.