Issues with Credit Liabilities

This article contains some FAQ about liabilities and copying liabilities from the credit bureau.

Understanding Liabilities

Did you pull a credit bureau, but the tradelines didn't copy to the liabilities section, in full or in part? There are a few reasons why that might be.

If you forgot to check the "Copy Liabilities" box when you requested the bureau, the system will not have copied debts from the bureau into the deal.

Solution: Click the "Copy Liabilities" button next to the client's Credit Report.

If the credit report has the debt indicated as closed, either by credit grantor or client request, the debts do not copy into the liabilities screen.

Solution: Manually add any closed debts with balances that need to be factored into liabilities.

If the credit report shows the debts have a zero balance, the debts are not copied into the liabilities screen. This was at request of our lending partners, as most zero-balance debts do not need to be factored into adjudication and an excess of debts causes clutter for their underwriters.

Solution: If requested by your underwriter, manually add debts to the liabilities section. You will need to set a balance of at least $0.01 in order for the liability to be transmitted to the lender on lender submission.

Sometimes tradelines are copied as the wrong credit type into the liabilities section. This happens most commonly with Home Equity Lines of Credit. They are inconsistently coded in Equifax, and sometimes will copy in as an Unsecured Line of Credit, rather than a Secured Line of Credit.

Sometimes you will notice a difference between the coding in the old format Equifax report and the Enhanced Equifax report, if you have access to both formats. When unsure of the correct coding, Scarlett defaults to Unsecured Line of Credit.

Solution: change the liability type to the correct Secured Line of Credit type.

If a debt is joint between your applicants it will be copied into each of their liabilities sections. This is because Equifax does not indicate on the report with whom the line is joint, so Scarlett cannot de-duplicate them.

Solution: delete the tradeline from one of the applicants' liabilities section.