A lender considers the following questions when deciding to approve your mortgage application: Is your credit history good? What is your yearly salary? What is your total amount of debt? What is your down payment?
Large down payments can help you overcome negative information on your credit history or a less than desired credit score. For the duration of your mortgage, however, you will pay higher fees and interest.
Unfortunately, you will need a good credit score to purchase a home. A huge down payment will not hide a low credit score.
Specifically, you should aim to have a 758 average credit score to qualify for the lowest interest rates, according to CNN.com.
Within the last 12-18 months, the minimum score to qualify for low mortgage rates has increased. Qualifying for the best mortgage rates has always meant that you need to have a good credit score.
Improving Your Credit Score to Get a Mortgage
Don’t be confused by your credit score. Simply remove bad credit information to see an improvement.
If you have derogatory information on your credit report, the “experts” say you can’t remove it. It is in their best interest that you think you have to wait 7-10 years for the bad information to disappear, in order to raise your credit score.
With a just a little bit of work, you can get a copy of your credit report to see what has been reported. If there are mistakes or errors on it, you can dispute them before the 7 -10 year waiting period.
You can start to correct the errors by writing a dispute letter to the credit bureau. Another option is working with the original creditor to fix the mistake.
More often than not, a well-worded credit dispute letter will resolve the error. In some instances, errors and sloppy work, hinder the investigation process.
Unfortunately, some credit bureaus do not want to spend the time or resources needed to investigate a dispute. Your dispute may be delayed or ignored if it is too labor intensive and therefore, not cost effective.
They want you to just live with the cost of having bad credit, and hope that you will give up on your dispute. This frustration causes some people to hire credit repair services to take over the dispute process.
When Will My Low Credit Score Be Raised
Most people are anxious to know how long it will take to raise their credit score. Each case is different, but typically, it takes an average of 6 to 12 months to see a drastic improvement in your credit score.
This is nothing compared to waiting seven to ten years for the negative information to disappear from your credit report. It will be well worth the 6 to 12 month wait needed to raise your credit score, so you can purchase a home.
Discover how lexington law helped a local couple get approved for a mortgage despite having bad credit. Visit their blog www.creditforcouples.com to find out how they removed charge offs and collection items. You can also grab a free credit repair letter or dial 1-866-246-7311 for a free consultation.