Repairing Your Credit in Time for a Home Loan
You’re in the market for a new home and want to apply for a home loan to get the dream house you’ve always wanted. You’re devastated to find out that you were either turned down for your loan or your interest rates for the loan are sky high. What can you do?
The reason for being turned down for your loan or given the high interest rates is all due to your credit report score and how the lender interprets the three credit bureau scores when it checks to see if you would be able to pay the loan back.
You can raise your score before applying for the loan if you act fast. Don’t wait until the last minute when you’re applying for a loan to try to raise your score. It will take some time to get your credit turned around.
It’s better to work on raising the scores first and then going to apply for a loan. The better your scores are, the more chance you’ll have to get a loan at a better interest rate. Obtain copies of all three of your credit reports.
Look them over to see if there are any incorrect items on them that could hurt your chances for a loan. Dispute anything that shouldn’t be on those reports. If your report shows negative items that are accurate, try to resolve them by paying those debts off - even if it’s a little at a time.
Pay as much as possible on a regular basis to show that you’re trying hard to repay your debt. If the creditors see that you’re trying, they’ll be more willing to report it to the bureaus, which would affect your credit scores in a positive manner.
Another option that some people try is to dispute a negative item that they know to be correct. If the credit reporting agencies can’t verify the information within a certain timeframe, they’re required to delete that item from their reports.
Although this is legal to do, it’s not really recommended. There’s no guarantee that even if the credit reporting company deletes that item, it won’t reappear later on when they’re finally able to verify the information.
Make sure you keep all of your accounts and bills up to date and current. Even late payments show up on those reports and will affect your credit score. The more positive items that are reported, the better it will look to potential lenders.
Unfortunately, some things will be hard to have removed from your reports, but don’t let that stop you from trying hard to get rid of the negative items. Don’t be afraid to ask for a reinvestigation from the credit reporting companies, since it sometimes helps.
Unfortunately, the big three credit bureau players don’t always play fair. That’s when you may well need professional legal help.
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