How to Fix Your Credit to Approve for Home Loan

by / Monday, 20 November 2017 / Published in Home Loans

Everyone longs to have their own home. Unfortunately, one major drawback that can make buying a home a difficult prospect is your poor credit history. Your low credit score is going to create complications whenever you are trying to purchase anything big, like a home or a car. Your credit score will tell all about your financial story and it plays a big role in deciding whether your home loan application will get accepted or rejected. So the worse your credit rating is, the harder it will be for you to acquire a home loan. Therefore, before you start your shopping for a home loan, go through your credit report and boost it up as much as possible.

If you are working on getting a home loan then you should first check where your current credit rating stands. You can easily and for free get a copy of your credit reports from all three credit reporting agencies. Each report may differ slightly from one another. It is important to know what information is included in each of the three reports. There are some creditors who submit information to all three agencies, while some only send reports to only one agency. So, when a home loan lender acquires your report to check your credit history, they are going to use the middle score from all three reports and decide whether you qualify for a loan or not.

You are entitled to a free copy of your credit report from all three credit bureaus every 12 months. To know your credit score you may have to pay a small fee. Once you have received your credit report, carefully go through it and make sure every detail is correct, including your name, current and previous addresses, list of employers, number of accounts, debts and all other public records regarding you.

You are likely to discover errors and those errors are what may be dragging your credit score down. Finding errors in your credit report is not uncommon for people. Such errors can be caused due to simple mistakes or due to identity theft. No matter what error they have, you should know them. After you have got hold of your credit report and found any error you can start cleaning it up as much as possible. Keep notes and copies of all the communications you do with the credit agency. If they are unable to verify the information that you are disputing, they will have to remove it. Within 30 days they will have to respond you.

If you find it too complicated or do not have the required time, you can get the help of any reputed credit repair agency. They are experienced and can help you get the repair work accomplished with no trouble. Once you have made all necessary changes in your credit report, you should request the credit bureau to mail you a revised copy.

Make sure all your employment history and identity is correct. Any inquiry made on your credit can hurt you. Every time you apply for a credit card, your credit report may end up with five or six inquiries. This will make the lenders suspicious about your credit-worthiness. Such inquiries when stretch out over time will be counted individually and can make things look worse. Lenders will also check how you have dealt with credit and debts in the past. The information on your public record will be checked as well where credit report lists things such as liens, foreclosure and bankruptcies.

Taken as a whole, there is no instant and easy free way to get your credit repaired, even when there are some minor errors on your report. It can be more difficult if you are struggling to save money. Once everything has worked out and you have applied for a home loan, make sure you do not mess things up. For instance, never go out and finance a car until and unless your home purchase is closed. Such steps can throw off your credit ratio and mess up the complete loan process. The best you can do is, try not to apply for any other loans or charge anything during the application process. You could end up losing your money as well as the home you wished to buy.