What Is Factual Data, and Why Is it on My Credit Report?
December 15, 2021
What Is Factual Data, and Why Is it on My Credit Report?
If you spot Factual Data on your credit report and have questions about why this hard credit inquiry is there, your application for a home loan may be the culprit.
A home is one of the largest investments someone can make. With mortgages often being in the hundreds of thousands of dollars, lenders want to know more about mortgage applicants before they lend them the funds to buy a home. Even landlords will use Factual Data to decide how likely their rental applicants are to pay their rent on time each month.
A home loan application or rental application can result in Factual Data credit report codes showing up on your credit report, so don’t be alarmed if you see that after you’ve been shopping for a mortgage or a refi. It just means that your lender or bank made a Factual Data hard inquiry to learn more about you and your credit.
If you have questions about Factual Data and how it figures into the mortgage-lending process, these facts can help.
What’s a Factual Data Credit Inquiry?
Let’s start by answering the question, who is Factual Data? Factual Data or FDC is a company that offers credit verification services to the mortgage industry. Seeing Factual Data means that you applied for a mortgage or to refinance a mortgage.
When lenders check credit as part of an application for a home loan, a process known as a credit pull, it may show up on a credit report as a hard credit inquiry.
Here’s where Factual Data comes in. FDC will show up on your credit report because Factual Data helps mortgage lenders get information on applicants’ credit through a merged credit report.
A merged credit report pulls an individual’s credit information from a credit card pull database—which includes TransUnion, Equifax, and Experian—into a single report that the lender will review as part of the mortgage lending process.
How Does a Hard Credit Inquiry Affect Your Credit Report?
A hard credit inquiry like one from Factual Data can drop a credit score, but only by about five points or less, according to Experian. Hard credit inquiries usually happen after an individual has applied for credit, such as for a mortgage, a car loan, or a credit card.
While one hard inquiry for a mortgage will only affect a credit score slightly, having several hard inquiries on a credit report can lower a credit score more. Applications for multiple credit cards can make a person look financially unstable.
Knowing this, if you plan to refinance your home loan or apply for a car loan, don’t also apply for several credit cards. The resulting drop in your credit score could result in a higher interest rate or being turned down for that loan.
Is Factual Data a Mortgage Lender?
No, Factual Data doesn’t lend money. However, it plays a key role in the mortgage lending industry, offering lenders a variety of reporting services, from prequalification to hard inquiry credit reports.
Before lending you the funds to purchase a home, a mortgage lender will want to know more about you and how you handle your finances. That’s where Factual Data comes in. Factual Data will look at your credit history to see your record of on-time bill payments and the amount of money you owe, as reported through FICO and credit reporting companies TransUnion, Equifax, and Experian.
This way, the bank or Factual Data mortgage lender will know more about how likely you are to repay the loan on time as agreed upon.
How to Remove Factual Data from Your Credit Report
If you think the Factual Data inquiry should not be showing up on your credit report, you have the right to dispute the error. Here are a few ways you can do this.
Dispute Factual Data Inquiry
Under the Fair Credit Reporting Act, credit reporting companies such as Factual Data must provide accurate and up-to-date information. You have the right to a free copy of your Factual Data credit report and to dispute any errors by contacting Factual Data and the three credit reporting agencies. Report any errors quickly, as they could impact your mortgage application.
Get Help from a Credit Repair Service
If you want to repair the damage done to your credit score by hard credit inquiries or other errors, you can enroll in a credit repair service. These services will clean up any errors in your credit report to raise your credit score. There will be a fee involved, but if you need a higher credit score to get approved for a mortgage, it may be worth it.
Sign Up for Credit Monitoring
If you think Factual Data made a hard credit inquiry for your credit report in error, there could be fraud involved. To make sure that someone isn’t trying to steal your identity, you could sign up for a credit monitoring service. Some credit cards offer these services as a bonus to their customers. Other companies offer this service for a fee.
How To Prepare for a Mortgage Application
Applying for a home loan or taking advantage of low-interest rates by refinancing your mortgage loan will require a good credit score. Since Factual Data’s hard inquiries into your credit report may lower your score a few points, it’s a good idea to prepare by boosting your credit score prior to filing your application. Here are a few ways to get ready.
Pay Bills on Time
Credit reports from all three credit-reporting agencies are heavily based on on-time bill payments. If you plan to refinance or purchase a home or car, make sure you have a history of paying on time. Not only will your credit score go up, but you’ll save on late fees.
Don’t Apply for Other Lines of Credit
If you’re planning on applying for a home loan, don’t try to buy a car or apply for a few credit cards during the same month. All those hard credit inquiries will lower your credit score and raise questions about your financial judgment.
Keep Credit Utilization Low
Keep the percentage of available credit used at 30 percent or less, and you will see your credit score rise. Keeping credit utilization low shows credit-rating companies that you are on sound financial footing and can resist the temptation of heavy credit card use.
If you see errors or fraud on your credit report, make sure to dispute them promptly with Factual Data as well as with FICO, Experian, Equifax, and TransUnion.
You’ll need to build that history so Factual Data has positive patterns to report. Six months to a year will allow time to reflect good credit management.
Frequently Asked Questions
You may still have questions about Factual Data and your credit report. These frequently asked questions may help you get the answers you need.
Why Did Factual Data Pull My Credit Report?
If Factual Data is on your credit report as making a hard credit inquiry, it is most likely there because you recently applied for a home loan, to refinance a mortgage, or to rent a house or apartment.
Seeing a Factual Data credit pull on credit reports means your mortgage loan application process is progressing and that your lender wants to know more about your credit history with a Factual Data merged credit report.
Is Factual Data Accurate?
Factual Data’s information comes from the three major credit reporting companies, so generally, the merged credit reports from FDC are accurate. Checking your credit report is always a good idea because errors can occur.
How Can I Reach Factual Data to Dispute an Error?
If you think there are errors in the information collected by FDC or that Factual Data should not be on your credit report, that should be reported to Factual Data. Any Factual Data dispute letters can be sent to the Factual Data address at P.O. Box 1055, Pittsburgh, PA 15230. The Factual Data dispute phone line is 877-237-8317. Factual Data will have 30 days to investigate your dispute and make any corrections.
What’s a Soft Credit Inquiry?
Soft credit inquiries, which can happen when a person’s background is checked for employment or when a consumer checks their own credit history, do not affect credit scores. These soft credit inquiries can also happen when a credit card wants to prequalify someone for one of their accounts before a person asks to open an account.
These soft credit inquiries are also known as soft pulls or soft credit checks and do not involve a person actively seeking a credit card, car loan, or mortgage.
How is My Credit Score Calculated by Factual Data?
Factual Data merges credit reports from the three major credit reporting companies using FICO scoring models. The Factual Data FICO score does not actually calculate your credit score and will not have answers as to why your credit score is a certain number.
Can I Dispute My Credit Score?
A low credit rating can keep you from getting approved for a home loan. While you can’t dispute the actual FICO credit score, you can dispute information that may be inaccurate on your credit report. The process is similar to an Experian hard inquiry dispute or disputes made for a Rocket Mortgage credit pull.
Your credit score is based on information including how much is owed, payment history, types of credit used, available credit, and public records information, so it is important to check your credit report for accuracy.
Can I Get a Copy of My Factual Data Report?
If a mortgage lender requested a merged report on your credit from Factual Data, you can request a copy of this report by contacting Factual Data by phone, mail, or email. It can be helpful in your search for a home loan.
If you are planning to apply for a home loan, refinance a mortgage or even apply to rent a house or apartment, then Factual Data will be a fact of life. Factual Data works with most mortgage lenders in checking credit reports of loan applicants.
A Factual Data credit check will show up as a hard credit inquiry on your credit report, and it will likely drop your credit score by a few points. As long as you don’t make a slew of other applications for loans and credit cards at the same time, you shouldn’t see a large drop in your credit score.
Look at Factual Inc. as a part of the mortgage loan application process. Once Factual Data has created a merged credit report for your mortgage lender, hopefully, you will be well on your way to getting your home loan approved.
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