Mortgage Blog

How important is it to clear up errors on your Credit Bureau?

April 17, 2014 | Posted by: Kelleway Mortgage Architects

Here’s a real-life example.  For the sake of a $20 reporting error on his credit bureau, one of our clients was being blocked from qualifying for his “best deal” mortgage option.
 

Parties involved include:

1)  Client who gave us permission to tell his story (Mr. Client)
2)  Credit Bureau (Equifax)
3)  Telecommunications Company (Rogers)
4)  Collections Company (Allied)
5)  Kelleway Mortgage Architects -primarily Serena (KMA)
 

Prior to Mr. Client coming to KMA to arrange a mortgage, he had been trying unsuccessfully for over 1.5 years to clear an error from his credit history that appeared on Equifax.  Mr. Client is a government employee who was relocated for his job to another location in Canada.  Unfortunately, his Rogers’ bill from his previous address was not forwarded to his new address and Rogers claimed he owed $380 on his account.

When the bill remained unpaid, Rogers added late charges to the amount, thus bringing the amount due to over $400.  Rogers then passed on the $400 accounts receivable to Allied to collect from Mr. Client.   However, while that collection was being passed on to Allied, Mr. Client disputed the bill of $380 saying that he had already closed his account and this subsequent monthly fee should not have been charged.   Rogers agreed to forgive the $380 if the client agreed to pay the interest carry charges of approximately $20.  Mr. Client paid the smaller amount.  Rogers then sent a statement to Mr. Client confirming that the amount owing on his account was $0.

Where communications broke down was amongst Rogers, Allied and Equifax.  On Mr. Client’s credit bureau with Equifax, there appeared a delinquent charge of over $400 with Allied and it was negatively affecting his mortgage application.  KMA negotiated with the mortgage lender to make an exception to a mortgage funding condition if Mr. Client could prove that he did not currently owe the $400.

To ease Mr. Client’s frustration and get him the best mortgage terms from the lender, KMA stepped in and spent 6+ hours over a week to advocate on his behalf.  First, KMA called Equifax to determine the next steps to get the error removed from Mr. Client’s credit history and restore his credit score to where it should have been.   Then, we obtained written permission from Mr. Client, and verbal confirmation during KMA’s 3-way conference calls, to act on his behalf with the various parties involved.

Equifax was adamant that Allied (not Rogers) must confirm that $0 was owing on Mr. Client’s account.  Rogers was saying that they would only communicate in writing with Equifax and Allied - not with KMA.  At one point we had the client on the line with Allied to again pay the $20, which had already been paid to Rogers, but we were told that the account was now closed and notification would be mailed in 5 business days – that would have been too late for the client to remove his subject to financing clause on his pending purchase of a home!  KMA then negotiated that if Allied could fax confirmation to us that $0 was now owing on Mr. Client’s account, then we would forward that to the lender and Equifax.  With faxed confirmation in hand, KMA was able to fulfill the lender’s condition for approving financing and the mortgage was able to fund in time for the client to close on the purchase of his home. 

In the end, KMA spent (in bits and pieces) about 6+ hours phoning, emailing and faxing to get Mr. Client’s credit error resolved.  Fixing credit bureau errors on behalf of clients is not normally part of the mortgage brokering process.  In this case, however, we made an exception as we were highly recommended to this client by another previous client.  We are happy to say that our persistence paid off and the client got the mortgage financing he wanted.

Mr. Client was ecstatic with the service he received from KMA and that is why we are his mortgage broker of choice.  As a result, he has already referred us to three people amongst his friends and family who may require mortgage financing.  Thank-you, Mr. Client, we love growing our business by word-of-mouth!

(Please add your comments and questions via the 'Got a Mortgage Question?' area and Glen Kelleway of Kelleway Mortgage Architects will reply.  Or, just give us a call at 604 476 0053 in Metro Vancouver or tollfree at 1 866 476 0053 in BC & Alberta.)

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