One of the most oft-repeated bits of advice related to FHA home loans or refinance loans is that it’s best to start early–at least a year in advance–when planning for an FHA loan application. One of the reasons to start early involves the length of time it can take to check your credit report to learn your credit score and to make sure there’s no erroneous data or evidence of identity fraud on your report.
With recent headlines about credit card data being stolen from major retailers, this advice couldn’t be more helpful. The Consumer Financial Protection Bureau (CFPB) is urging customers of “big box” retailers recently in the news for data breaches and hacking problems to check their credit card activity and credit reports for signs of fraud or identity theft.
In a recent CFPB article, the bureau urges borrowers to check all credit accounts for unauthorized charges or debits.
“If you have online or mobile access to your accounts, check your transactions as frequently as possible. If you receive paper statements, be sure to open them and review them closely. If your provider offers it, consider signing up for email or text alerts.”
CFPB also warns customers to report even minor unauthorized or suspicious activity.”Sometimes thieves will process a small debit or charge against your account and return to take more from your bank account or add more charges to your credit card if the first smaller debit or charge goes through. And keep paying attention—fraudulent charges to your card or fraudulent debits to your bank account might occur many months after the theft of your information during a data breach.”
This type of problem should be at least reported to both the credit card company and the credit bureaus before you apply for an FHA home loan–disputed charges and transactions take time to clear up and there is no guarantee that even with a disputed or investigated issue that your home loan application will go through as normal until the questions about your accounts have been properly addressed.
It can take many months to clear up fraud issues.You may be required to file local police reports, FBI complaints and more–the paperwork can take time to fill out, submit, and have processed. Investigation times also vary depending on agency workload and other factors.
The bottom line–in the wake of recent headlines about credit card hacking and data breaches, it’s important to keep a close eye on your credit in the preparation time leading up to your FHA home loan application.