If you have damaged credit, you need to know that you are not alone. In fact, a lot of people out there are struggling with bad credit for on account of many reasons. For instance, you may have been hit by the recession, and you lost your job without any warning. Or maybe you are in the middle of your divorce processes.
More often than not, damaged credit may result from misappropriation of funds, poor spending habits, financial mismanagement or even a foiled business. If you are faced with any of these circumstances, you may have to consider applying for a mortgage loan that will help you pull through these economic uncertainties.
However, for you to get accepted for any mortgage, you need to show interest in repairing your credit, or at least, try it.
It is vital that you clean up your credit card. To do this, you might have to ask the three major credit bureaus to provide you with your credit report. You need to examine it carefully.
Make sure it contains no errors, unauthorized charges or inaccurate information. All credit holders have the right to dispute errors in their credit files. This is one of the quickest and smartest ways to boost your credit score.
Be sure to check out for negative remarks on your credit report. If you find one that is older than seven years, do not hesitate to ask the credit bureaus to expunge it off your credit report. For example, you may have filed for bankruptcy before, like 7 years ago – the record need not to be included in your recent credit report.
The next thing that you have to do is to plan how you are going to improve your credit score. You need to ensure that you have no past due debts in any of your accounts. You need to be punctual in submitting your payment to show your creditors that you are seriously concerned about your credit rating.
If you have damaged credit; you cannot afford to make another late payment. You also need to learn to keep your credit usage as low as possible. It is best if you can manage to use less than 20% of your credit limit.
You also need to check out if the government offers loans. These loans are great for those with bad credits. You need to find out if you qualify for the same. What is more is the government loans are less strict on clients with bad credit as compared to the commercial lending institutions or banks. Their interest rates are incredibly low.
When applying for your mortgage, you should not submit several applications to various lenders. Too many inquiries can send a negative impression to your potential lender. It can also cause a dramatic drop on your credit score.
If you are careful to follow these tips, you are going to get accepted by your lender when applying for your mortgage.