Fix Bad Credit So You Can Buy a House
Almost 99% of the homes purchased in the United States today are bought using mortgage financing.
Since almost all mortgage lenders use credit scores to make a lending decision, borrowers with bad credit may be denied by a lender, or given loan terms and conditions that are not as favorable as those borrowers who have good credit.
The better the credit score, the better the interest rate and terms the loan may have.
In five easy steps you can improve your bad credit in preparation for buying your home.
Obtain a Copy of Your Credit Report Before Applying for a Loan You may not be aware of what is showing up on your credit report.
In order to know the situation you are dealing with and what may need to be fixed, the first step you should take before applying for a mortgage loan is to request and obtain a credit report from each of the three credit agencies, TransUnion, Experian and Equifax.
You can order a copy of your credit report via phone, fax or online.
Once you receive each of the credit reports, it is important that you thoroughly review the information.
Go line-by-line looking for any inaccuracies in the information listed and all of the negative credit items, late payments, non-payments, discharges and write-offs.
Highlight or mark items that need attention.
Make sure to do this for each credit report because information may vary from credit agency to credit agency.
Once you have each of the items marked on each of the credit reports, write a letter to each of the credit agencies disputing any of the negative or inaccurate items that appear on your credit report.
Provide a complete explanation as to why these items should be removed from your credit report, it is inaccurate or the information does not belong to you.
Take Action to Improve Your Credit Rating It is also imperative to address the negative, but accurate, items on your credit report.
These items may include late payments, unpaid payments and items in collection.
Contact each of the creditors and collection agencies handling the bad debt.
Talk with them to see what kind of arrangements you can work out with them to either payoff the debt completely or to make payments to start paying off the debt.
It is important to remember that whatever arrangements you make with the creditor need to be in writing and you need to stick to them.
For example, if you say you are going to pay $25 a week on a debt, then it is imperative that you pay $25 a week.
Any disputed items removed by the credit agencies will trigger a new credit report to be sent to you.
As these negative items disappear, your credit score will go up, improving your credit and preparing it for you to buy a home.
If you take action now, when you find that home you will be able to qualify for your mortgage without any problems.
Since almost all mortgage lenders use credit scores to make a lending decision, borrowers with bad credit may be denied by a lender, or given loan terms and conditions that are not as favorable as those borrowers who have good credit.
The better the credit score, the better the interest rate and terms the loan may have.
In five easy steps you can improve your bad credit in preparation for buying your home.
Obtain a Copy of Your Credit Report Before Applying for a Loan You may not be aware of what is showing up on your credit report.
In order to know the situation you are dealing with and what may need to be fixed, the first step you should take before applying for a mortgage loan is to request and obtain a credit report from each of the three credit agencies, TransUnion, Experian and Equifax.
You can order a copy of your credit report via phone, fax or online.
Once you receive each of the credit reports, it is important that you thoroughly review the information.
Go line-by-line looking for any inaccuracies in the information listed and all of the negative credit items, late payments, non-payments, discharges and write-offs.
Highlight or mark items that need attention.
Make sure to do this for each credit report because information may vary from credit agency to credit agency.
Once you have each of the items marked on each of the credit reports, write a letter to each of the credit agencies disputing any of the negative or inaccurate items that appear on your credit report.
Provide a complete explanation as to why these items should be removed from your credit report, it is inaccurate or the information does not belong to you.
Take Action to Improve Your Credit Rating It is also imperative to address the negative, but accurate, items on your credit report.
These items may include late payments, unpaid payments and items in collection.
Contact each of the creditors and collection agencies handling the bad debt.
Talk with them to see what kind of arrangements you can work out with them to either payoff the debt completely or to make payments to start paying off the debt.
It is important to remember that whatever arrangements you make with the creditor need to be in writing and you need to stick to them.
For example, if you say you are going to pay $25 a week on a debt, then it is imperative that you pay $25 a week.
Any disputed items removed by the credit agencies will trigger a new credit report to be sent to you.
As these negative items disappear, your credit score will go up, improving your credit and preparing it for you to buy a home.
If you take action now, when you find that home you will be able to qualify for your mortgage without any problems.
