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Credit reports show available credit balance (how much you can potentially charge), and outstanding balance (how much you have already charged), and your payment history of on time or late (and how late). Credit reports do not show the "amount" of your monthly payments, only if they are on time or not.
If someone incorrectly thinks that their only having made minimum payments on their credit cards in the past is what has negatively affected their credit score, then they need to ask for clarification from the lender that has rejected them, to find out the real reason.
They do actually but not sure if the one they report to lenders has it or not.
A while back I pulled my free annual credit report and was very surprised to see one of the bureau was showing the minimum payment as well as what was actually paid month by month. Then recently (like six month ago) I pulled my FICO and did not have it. So, not sure what exactly is reported to lenders. I also found things are different as far as scores between what is reported to lenders and what one see in my FICO. Before any big ticket item that I need to finance, I always pull my FICO scores and find always the one reported to the lender is higher. I will take that .
To OP: Something doesn't add up. A person with FICO 800 would be rejected because he had high balances and paid only the minimum in the past? Doesn't make sense to me. If anything, he has shown that he was persistent and fulfill his obligation. As others said debt to income or other things might be shaky.
When credit is pulled for a mortgage application, the credit report does indeed show the credit card limit, the current balance, and the minimum payment that is due for each card/loan at the time that the credit report is pulled. That's how liabilities get populated in the loan software that we use to generate approvals and the loan app. It comes straight from the credit report pull.
I agree with everyone else in that there is more to this story then a history of making minimum payments. When looking at borrowers, we love excellent credit scores, zero balances, healthy assets/reserves, low DTI ratios, and stable employment histories.
OP, it could be possible that the particular investor who is offering the loan and low rate your friend is interested in has some weird and stringent overlays, but even still, getting denied for making minimal payments despite an excellent credit score is just really unheard of. I also find it strange that 20% down would make a difference vs 10% down, that makes me think the resulting MI could be causing a DTI issue also.
Either way, I'm just speculating as it could be something very simple that you friend either isn't telling or simply doesn't understand due to the loan officer not explaining the details to him clearly.
When credit is pulled for a mortgage application, the credit report does indeed show the credit card limit, the current balance, and the minimum payment that is due for each card/loan
But still, showing the minimum payment due is not the same as showing that the person only paid the minimum. There seems to be a missing component in the OPs scenario.
They do actually but not sure if the one they report to lenders has it or not. A while back I pulled my free annual credit report and was very surprised to see one of the bureau was showing the minimum payment as well as what was actually paid month by month. Then recently (like six month ago) I pulled my FICO and did not have it..
I've not ever scene it, but I acknowledge that I cannot say that it has not happened to you. I cannot find "official" information on the internet about "how much was paid" being on credit reports, but maybe someone else will link us to something.
I pulled my credit report from Trans Union and under each creditor it showed, going back about 2 years, each months balance, credit limit and payment. So for example, if I had a credit limit of $21,000 in my ATT Master Card and owed $20,876 in a particular month and paid only $417 that month, anyone who looked at my credit report from Trans Union could see that I was nearly maxed out on my ATT Universal Master Card for those months indicated. Even if TODAY my balance was ZERO because I paid it off, loan officers, or employers or anyone else who had access to my Trans Union Credit Report can see that in the very recent history I was living on the edge sending in the minimum, likely paying lots of interest on a huge balance and had a history of irresponsibility because I nearly maxed out my credit cards and paid only the minimum for months and months.
Now for a mortgage application, they will look at both your current situation and your past. The loan offer told him they look at your employment and credit history and while it was great he had a zero balance at the time of application, previous minimum payments for months and months for a maxed out credit card is a negative and was held against him in the mortgage review. This is similar to being held responsible for job hopping during the last few years even though at time of application for a mortgage you are working in a great high paying job.
Yes he may have a high FICO score today because he has zero debt today, but just a few months ago he was at the edge barely getting by and that was held against him.
Last edited by AHomeSeller; 12-30-2012 at 04:23 AM..
The only way his lender could tell he was maxed out would be if his lender had pulled all of the reports. If I pull a tri merge right now, I can see the date of last activity, but not the amount of the last balance. Seriously, do you know how many people use AE or their Citi card for everything, rent included, for points? Then they pay it off weekly or monthly and rack up free trips. On my reports, all it shows is a 0 balance with a date of last activity of 12/2012.
Consumer reports, ie credit report dot com and such will give you an in-depth review, but only so the consumer can see where the issue is. Tri-merged reports are a snapshot in history, no more, no less.
Creditors can tell how much you pay per month? I didnt know that. I thought once you made your minimum payment you were ok.
It has been a number of years since I pulled my own report, and even longer since I pulled credit reports on folks as part of my employment, and even waaaaayyyy longer since I pulled the reports while working for a bank, but in none of those did it state the "amount of the last payment". Perhaps I'll pull a new one, just to see what is there.
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