The term “bad credit” means the credit report shows that the borrower has a history of financial problems. There are many factors that can cause this to occur. Some people have paid back bills late, defaulted on loans or home equity lines of credit, or defaulted on a number of credit accounts. Each of these situations makes it difficult for the lender to establish how much of a risk the borrower is as a credit risk.
Bad credit can be corrected by making payments on time.
Paying off late or missed bills with the intent of paying them off is a good idea. This will help clear up your history and you will usually be given a lower interest rate for your new credit card. Try to keep your bill paying to a minimum by having only the minimum payment on each credit account.
Before applying for a mortgage, the lender will run your credit report to determine if you have any defaults, foreclosure, bankruptcy, tax liens, property liens, or high interest rates. When you apply for a mortgage, you must answer questions that cover all of the information listed above. If you are a person who does not know what the debt is, this is where you may pay more than you need to.
The lender wants to assure themselves that you are an accurate person in order to be approved for the mortgage loan you are requesting. If you make the repayments on time and have no default judgments, then you will find the mortgage loan approval is much easier.
Your mortgage broker can also review your credit report and offer some additional suggestions on how to fix your bad credit. Make sure that any offer you receive is the best offer available.
You need to follow the application process and make sure you are following all of the instructions to the letter. Try to avoid any mistakes or exaggerations on your credit report. You want your credit to reflect how responsible you are and how well you pay your bills.
Your credit score will determine the amount of interest you are charged for your home mortgage loan. The lender will base this on your credit report. Try to remember, that if you make a mistake on your credit report, you will lose out on the same interest rate that a person with no bad credit would pay.
It is very important to get your current credit report and examine it closely.
You should check for erroneous information and have them corrected. If there is any error on your credit report you should dispute it with the credit reporting agency.
You should make a copy of your credit report and keep it safe until you have received your home mortgage loan. Do not share this with anyone. If you do receive a call from someone asking for a copy of your credit report then verify the identity of the person before giving them your copy.
If you have any questions about any errors on your credit report, make sure you speak to a representative from each of the three major credit reporting agencies. You should contact each of the three agencies and check to see if they have any errors on your credit report.
Credit repair is not hard to do but the results are not immediate. The longer you wait to correct errors and inaccuracies, the worse your credit score will become. You should start repairing your credit today and you will find that your credit rating will improve.
- If you have bad credit, there are companies that specialize in helping people with bad credit.
- Many of these companies are government funded and they provide free or low-cost credit counseling.
- If you use the services of these organizations and they are consistent in correcting the errors, you should have a better credit rating within a short period of time.