Can buying a rental property wreck your credit rating?

[holymoly]

Did buying the house damage my credit rating somehow? Or should I worry that something fraudulent has happened?

When I was buying my first rental property this summer, the mortgage broker told me my Beacon score. It was excellent. Now (yesterday and today) a phone company has run two credit checks on me (once based on the CC I used for ID and another full report using my SIN) and it seems I`m a bad risk. I bought the house with 20% down, haven`t been late on a payment, don`t carry CC debt. Other than the rental property mortgage, I don`t have any outstanding loans other than a healthy HELOC of which only about $10k is used.

Should I order a credit report on myself? I`m worried that having three report inquiries in two days will make things even worse for my score.

 

[MonteDobson]

QUOTE (holymoly @ Feb 13 2009, 02:55 PM) Should I order a credit report on myself? I`m worried that having three report inquiries in two days will make things even worse for my score.

Yes, I would order a copy of your credit report to see what is going on. Check out https://www.econsumer.equifax.ca/ca/main?li...OPIEM〈=en

 

[Noel]

If you`ve made all your payments and obligations on time, your credit will reflect that.

Yes, order your credit report. This will tell you what the lenders and phone companies see. The inquiry you make will not be counted on your bureau. It`s always good to know where you stand.










QUOTE (holymoly @ Feb 13 2009, 02:55 PM) Did buying the house damage my credit rating somehow? Or should I worry that something fraudulent has happened?

When I was buying my first rental property this summer, the mortgage broker told me my Beacon score. It was excellent. Now (yesterday and today) a phone company has run two credit checks on me (once based on the CC I used for ID and another full report using my SIN) and it seems I`m a bad risk. I bought the house with 20% down, haven`t been late on a payment, don`t carry CC debt. Other than the rental property mortgage, I don`t have any outstanding loans other than a healthy HELOC of which only about $10k is used.

Should I order a credit report on myself? I`m worried that having three report inquiries in two days will make things even worse for my score.

 

[holymoly]

Thank you. I`ll order it right away.

 

[DaveRhydderch]

It is important you understand how your credit score is calculated. Things that can worsen you score include:

1. Apply for a loan of any type.
2. Having a company check your credit
3. Taking on more debt (i.e. getting a loan)

I have 2 mortgages, 2 credit cards, and a line of credit all which I have never had one late payment on, and my credit is only considered "fair". I also don`t carry any actually debt on my credit cards (pay off each month). However, my problem is I don`t have a long enough history.

All in all, I imagine nothing is going on. Your credit report is simplying showing the effects of you doing stuff.

HOWEVER, as a side note, sign up for a monthly credit check. I pay 15 bucks a month and get an email as soon as something changes. It prevents against id theft, and you can keep track of your credit score. Talk to whatever bank you use, they all use this service. It can be very hard to rebuild your credit if something fradulent happens.

 

[RobMacdonald]

yes, I would order a credit report immediately. A rental property mortgage should not affect your rating that substantially. With all the reports around identity theft, it`s a good practise to check your own report once a month.

If you want further details on how to assess your rating, or how your rating is calculated, feel free to send me a personal message.

 

[holymoly]

Well, I ordered the report. My FICO score is 801. "Your score is well above the average score of Canadian consumers and clearly demonstrates to lenders that you are an exceptional borrower."

What`s wrong with Rogers???

 

[holymoly]

QUOTE (RobMacdonaldCMT @ Feb 13 2009, 04:31 PM) yes, I would order a credit report immediately. A rental property mortgage should not affect your rating that substantially. With all the reports around identity theft, it`s a good practise to check your own report once a month.

If you want further details on how to assess your rating, or how your rating is calculated, feel free to send me a personal message.
Thank you, Rob, Dave and everyone else.

 

[RobMacdonald]

That is an excellent score!!! Rogers probably pulled a report for someone with the same name.

 

[holymoly]

QUOTE (RobMacdonaldCMT @ Feb 13 2009, 04:32 PM)
That is an excellent score!!! Rogers probably pulled a report for someone with the same name.


My name is unusual, and they used my SIN the second time, so there must be some other explanation. I can't figure it out.

 

[RArora]

Call them back and ask to speak to a manager to explain themselves-to allay your fears and so you can rest easy. that is a score one doesn`t usually see-so ask what did they see and what they meant by their comment about your credit!

 

[Dan_Eisenhauer]

I have twice been turned down by Rogers, and got a phone each time from another telco within a couple days thereafter. Rogers will be very unlikely to ever see my shadow cross its doorstep again. (Never is a long time.)

 

[lanedry77]

Equifax and TransUnion have different scoring algorithms and hence they calculate different scores, and nearly always have different data. I would check the other one (whichever one didn`t give you the 801, which is spectacular by the way) and see what they have. There`s no way to know who Rogers uses, so best check the other.

And remember, you can get a free report from both Equifax and TransUnion, you just have to wait for it to be mailed to you and it doesn`t have your score - just the data.



David.

 

[HeatherShadlock]

I definately agree with David. I have seen clients with differences in the triple digits between Equifax and Transunion. Some lenders and credit companies report to both, some just report to one. Always good to know that both bureaus have been looked at for identity fraud. Mark on your calendar every year to pull a credit bureau from Equifax and 6 months later to pull one from Transunion. You are able to get one per year from each company for free. If you really want to make sure you are monitoring your credit, seeing how it can be your life line as an investor, then I would recommend signing up for mycreditalert. It will notify you immediately everytime that someone taps into your bureau. And it is not that expensive when you think of the alternatives. And you can log on anytime to look at it.
If both bureaus show that your credit is fine, I would find another company to deal with. I am not a big fan of trying to do business with companies that simply don`t want mine. With a score of 801, you are well above many other people, and I would take your business to someone that would appreciate it!

 

[holymoly]

Thanks again everyone for all the good advice. I had no idea that you could get free credit reports, or that the findings from Equifax and TransUnion could be so different. I`m going to order a report from TransUnion and will follow up with Rogers.

You guys are great. It`s good piece of mind to know I can put my questions out there and you`ll generously share your knowledge.

ETA: My TransUnion rating came in even higher, at 863. There`s something really wrong with Rogers!!!

 

[Nir]

"My TransUnion rating came in even higher, at 863"

Holy Moly, I understand you want to impress but isn`t 850 the max? (just joking although I really thought 850 is the max)

Dave et al, I heard about the "monthly credit check" too. I think "Credit Alert" is the company offering it for RBC clients. However, doesn’t it affect your score when other companies pull your score on your behalf?

Neil

 

[AdamBlackmore]

Yeah, I`m pretty sure max FICO score is 850..... I don`t think 863 exists...

 

[EdRenkema]

I know my score was 840 while I had only one rental property, now I believe it is around 680 altho not sure. This is because I have 3 secured LOC loans used for other rental properties.

 

[holymoly]

QUOTE (investmart @ Feb 14 2009, 11:45 PM) "My TransUnion rating came in even higher, at 863"

Holy Moly, I understand you want to impress but isn`t 850 the max? (just joking although I really thought 850 is the max)
Ha ha! It`s nice to be among people who would be impressed by credit scores.

When I first learned mine, in the summer, I was so happy I was literally jumping up and down, I was so thrilled and proud of myself.

Almost all of my friends are designers and have beautiful, high quality things and lovely fully renovated homes, whereas I have a place that needs gutting and is full of second-hand stuff... I`m probably overly frugal, but have few debts... and ya know, everyone says "Oh, your house is stunning" to people who make that their priority, but not many people say "Oh, you`re so responsible with your spending"

to people who don`t have all the newest and nicest stuff. (Of course, I shouldn`t imply that everyone who has a nice home overextends themselves!)

But yeah, the TransUnion report says 900 is the highest. And, according the report, almost 25% of the Canadian population has a credit score higher than my 863.

 

[holymoly]

QUOTE (KW1 @ Feb 15 2009, 12:04 AM) Yeah, I`m pretty sure max FICO score is 850..... I don`t think 863 exists...
Both reports include a graph that shows what percentage of the population has which score, and another graph that plots your score on a range from the lowest to highest score.

The TransUnion graph goes from a score of 300 to a score of 900, which they mark "lowest" and "highest." The Equifax one goes from "up to 549" to "850+."

TransUnion says that my score ranks higher than 75.86% of the population. Equifax says that my score ranks higher than 72% of the population. That still leaves a lot of people with scores higher than mine.