Seeking a Mortgage, but I have bad credit

Have you decided the time is right to purchase a home? This is a very exciting moment in your life. However, this can also be a very difficult and challenging time. If you have poor credit, this can get in the way of obtaining a mortgage for a home. Luckily, there are steps you can take to begin improving your credit.

Mortgage lenders will look at your credit report to determine whether or not they wish to extend you credit. They will also use this as a guideline to determine the interest rate for your mortgage. You will pay higher rates if you have credit problems. There are lenders who are willing to work with people that have poor credit. However, if you are granted a loan, the terms will not be as good as they would be if you had good credit.

Your credit will most likely be considered “bad” if your credit score is lower than 620. Assuming you know that you have credit problems, it will be a good idea to order a copy of your credit report as well as your credit score. This will give you an opportunity to identify problem areas with your credit and begin working towards a better credit score.

After you receive your credit report, it is time to look the report over very carefully. You may find that there are errors on your credit report. Perhaps a creditor has reported that you were past due on a payment in which you were not. If you find any discrepancies on your credit report, dispute them immediately.

You can dispute information on a credit report by writing a letter to the credit bureau. In the letter you need to include all information about yourself such as your name, address, date of birth and social security number. Then you will need to identify the creditor that you are disputing. Include the name of the creditor as well as your account number with them. List the reason that you are disputing what is found in your credit report. If you have any information to help prove your position, send it with the letter. Ask the credit bureau to investigate your dispute and to update your credit report if they find that your dispute is correct. Do not forget to sign your letter before you send it to the credit reporting agency.

Let us assume now that any inaccurate information has been removed from your credit report. What can you do to improve your credit from this point forward? One of the most obvious ways is to make sure you pay your bills on time each and every month. Whatever your minimum payment or monthly payment to a creditor may be, be certain to pay this amount in full each month. If you ever to have a delay in making a payment work hard to be sure it is not paid more than 30 days late. After a bill is 30 days overdue it can and often will be reported to a credit bureau.

Your credit may be less than perfect or a lender may not be willing to loan to you because you have too much of your monthly income going out to pay on debts. Try to pay off some of your smaller debts if you can or consider consolidating your dates into one lower and easy payment each month. This step too can help you to obtain the mortgage you need.



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