A consumer who was recently denied a mortgage told me she was denied due to information her lender received from annualcreditreport.com. I explained to her she must have misunderstood her lender.
Lenders DO NOT use annualcreditreport.com and they never will. Mortgage lenders actually do not even get your credit reports directly from the credit reporting agencies. As part of the mortgage application, an applicant grants permission to a bank allowing the bank to order a credit report. Once the bank has the applicant’s permission to order a credit report the bank has a “Permissible Purpose” as defined under the Fair Credit Reporting Act.
Mortgage lenders purchase consumers or mortgage applicant’s credit reports, also called credit files from credit resellers. A credit reseller is a company who retrieves consumer’s credit reports from one or multiple credit reporting agencies depending on how the report is ordered from the bank. The lender is the one who decides what type of reports they want and if they want credit scores or not. In mortgage lending, it is typical for a bank to request credit reports containing credit scores from all 3 major credit reporting agencies.
Annualcreditreport.com is a consumer website. This website was created as a resource where consumers can annually get their credit reports from Experian, Equifax, and Trans Union at no cost. This site is for consumer use only and is not used by lenders. Consumers who use annualcreditreport.com must answer personal identifier questions on the site before the site releases their credit report. The purpose of the personal identifier questions is to ensure a consumers credit report is only released to the actual consumer. Credit reports contain a vast amount of personal information so this identification process is very important. The questions asked are based on information contained within the credit report. Trust me; you do not want your credit report in the wrong hands.
Credit Reporting / Scoring Expert, Chris McConville is the President of Credit Education at CureMyScore.com and founder of myexpertcreditwitness.com where he works as an Expert Credit Witness in both Federal and State Court. With working in the credit and mortgage fields since 1991, he’s dedicated to sharing his knowledge to educate consumers.
