In the Arizona purchase contract, it is the buyer's obligation to obtain full loan approval without conditions by the close of escrow.  Within the first 5 days of contract acceptance, you should apply for your home loan.

What is an LSR?  This is a form that is provided by your mortgage broker or lender. The Loan Status Report is attached to the offer to purchase a property. It must show the Buyer's intent of securing a loan.

Can I run my own credit report?  Sure, you should look at your credit every year.  At www.annualcreditreport.com you can access your report for free every year. This does not harm your FICO score.

What if there is something wrong on my report?  In most cases, you can dispute this online.  It should be disputed with all credit bureaus: Experian, Equifax, and TransUnion.  If a record is being disputed, it will not be scored in the FICO score until it is resolved.

Do you need credit counseling?  www.nw.org

Experian is the largest credit bureau of the 3.

Understand, anyone can generate your credit report just from your address!  If you find this has been done, it is illegal (without your permission). Opt out of inquiries at: www.FTC.gov

Fair Isaac Co. (FICO) issues a numeric score to indicate an individual's overall creditworthiness.  Scores range from 300 - 850.

If your score falls under 600, you most likely will need to apply for programs that are not FICO score driven.  This would include FHA loans.  www.HUD.gov

If you find yourself in pre-foreclosure please call (888) 995-HOPE.  Or you can visit: http://www.995hope.org/

What happens to someone's credit score that has a foreclosure,bankruptcy or short sale:  Credit scoring formulas are not disclosed so there is not an exact answer and the impact also depends on the person’s previous credit history.  Credit scores take into account the previous 7 years of credit history with more weight given to recent activity.  A person with a 7 year rock solid credit history will take less of a hit and their score will also recover quicker.  Foreclosures seem to drop scores 200-250 points and a foreclosure will also act as the heaviest “anchor” to the credit score as you move forward.  A foreclosure automatically disqualifies a borrower from getting a mortgage for 3 years (there are rumors that Fannie/Freddie wants to change it to 5 or even 7 years).  A Bankruptcy seems to drop scores 100-200 points and automatically disqualifies a borrower from getting a mortgage for 2 years.  The effect of a short sale can vary greatly.  The credit bureaus have not created a special designation for a short sale.  Many borrowers have to go 30, 60, 90 days late in order for a lender to consider accepting a short sale which will obviously have a huge impact on the credit score.  Short Sales seem to usually show up as “Creditor settled for less than amount due” similar to how settling a credit card balance would show up on a credit report.  In some rare cases, they may even report the account as paid in full.  There is not an automatic disqualification time period for short sales (yet) but many lenders are adopting their own policy that treats it as if it were a foreclosure.  Another item of note is that once a borrower goes 120 days late or once a Notice of Default is issued the Fannie/Freddie approval engine views this the same is it does a foreclosure.  The most important thing to do after having something bad happen is to re-establish a positive credit history.

(courtesy of Ryan Halldorson - HomeSmart Mortgage)