subject: A Look At Improving Your Credit Score To Obtain A Mortgage [print this page] You're in search of a new home and would like to apply for a mortgage to get the house of your dreams. But you're shocked to discover that either your loan application was refused, or your rate of interest on the loan is ridiculously high. Do you have any alternatives to get out of this mess?
Being refused for a home loan or being saddled with a high rate of interest is all related to your credit score and whether the lender thinks you can afford to make the payments.
If you are planning to buy a home, work on improving your credit score before you apply for a mortgage. Give yourself no less than a year to get your credit back on track and then visit your lender.
If you raise your score before consulting your lender, you will have a higher chance of qualifying for a loan and getting a decent rate of interest. Start by obtaining a copy of each of your three credit reports.
Then check them carefully for any incorrect information that will thwart your efforts to get a mortgage. If you find an error, get in touch with the credit agency to try and fix it. If you find any adverse concerns which are accurate, you need to address them by paying off your creditors, as soon as possible.
Even regular, small payments will add up in the end. And it will demonstrate that you're committed to paying off your debt. Once your creditors see that you're making an effort, they might pass along the information to the credit agencies. This will almost certainly increase your credit rating.
Some desperate people will try to dispute a bad debt, even though they know it to be accurate. If the credit agencies are unable to confirm the facts within a certain amount of time, they're obliged to take off that item from your record.
Even though this is completely legal, it's not a good idea. There's a good chance that your bad debt will show up again when the credit agency has proved that the debt is actually yours.
Take care you keep all of your bills and credit accounts up to date and in good standing. Late payments show up on your credit rating and will lower your rating. You're looking for lots of positive items on your report so potential lenders will look more favorably on your request.
Getting negative items eliminated from your credit file is not always easy. Persistence is the answer to this problem. If they say the debt is in fact yours, do not be afraid to ask for it to be removed again. Sometimes it takes several attempts to get something taken off.
If they do not remove the items, work on getting more good payments reported. A large number of of positive items may increase your score even though the negative items are still there. After you have tried everything you can to raise your scores, shop for a lender to put in an application for a home loan.
