Clients facing increasingly tight deadlines to secure mortgages are getting tripped up by credit bureau mistakes that the industry is too slow in clearing up, say brokers.
“It’s not simple to get something removed (from a client’s credit report),” says Paul Mangion, a broker with The Mortgage Centre in Mississauga, Ont. “If your mortgage is closing in a month, it’s not an easy task.
“I’ve seen clients pay higher rates because of things (credit reporting agencies) have done, not necessarily errors but things that could be corrected.”
Those errors are something buyers in the GTA and other markets marked by multiple bids simply can’t afford. Even nationally, home sales rose more than 3 per cent in May over the year-ago period as the Western provinces rebounded. That competition within the market is forcing real estate transactions to happen over a few hours as opposed to a few days, making time of the essence.
A credit bureau mistake that almost cost one couple their first home was recently the focus of a Toronto Star report highlighting the difficulty in getting bureaus and creditors to correct their mistakes.
Sabeen Bubber, a mortgage professional with Verico Xeva Mortgage in Vancouver, says the reporting companies need to make it easier for clients to report inaccuracies or update their reports – a move that would expedite the process.
“I think that (credit reporting companies) need to accept certain things from consumers or hold creditors responsible for their reporting factors,” she says, adding that some creditors are less responsive to concerned calls from consumers. “If (the credit reporting company) calls the creditor they would pay more attention to it.”
John Panagakos, a broker with Dominion Lending Centres, says trying to right these inaccuracies with credit reporting agencies is especially frustrating for clients, who don’t understand how the error was made. These reporting agencies need to be held accountable for their operations, he says, which is a difficult task because they have such a monopoly on the market.
“Maybe it’s something we all have to address with the credit (reporting) companies,” he says, pointing to the lack of oversight and accountability within these companies. “We should have a liaison with (the credit reporting companies).”
Bubber says that accountability is especially important, given how reliant we are on credit.
“Our entire economy and our culture is based on credit,” she says. “(That’s why we need) a more compassionate body that looks after people’s credit.”
Until then, it’s likely these discrepancies are going to continue. For his part, Panagakos tells clients to document every interaction with the credit reporting company they use.
“First ask who you’re talking to, how long it will take to fix,” he says. “Get a time agreement down and document everything.”