Your mortgage application will be considered for approval based on the following questions: How high is your credit score? What type of information is in your credit history? What is your combined income? How many outstanding debts do you have? How much is your down payment?
A gigantically large down payment may dilute the negative effects a spotty payment history or low credit score to some extent. However, be prepared for high fees and interest throughout the life of your mortgage.
In short there is no way around having a low credit score. Even with a large down payment you will still need a good credit score to make home ownership a reality.
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.
The “experts” claim that you cannot remove derogatory information from your report. They want you to believe that there is no way to raise a low score without waiting for the bad credit to automatically disappear ” often taking 7-10 years.
However with minimal effort you can obtain your report and see exactly what is there. Often there will be mistakes or errors that you can dispute before the 7-10 year period.
To dispute these errors you can start with a dispute letter addressed to the credit bureau or credit bureaus. Otherwise, you will have to work directly with the creditor to resolve the mistake.
Sometimes, a professional credit dispute letter will expedite a resolution. However, investigation methods can be sloppy and filled with errors.
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.
Their hope is that you will give up on your dispute and just live with the high cost of bad credit. This is why many people hire credit repair services to use the dispute process for them.
How much Time Will it Take to Raise my Low Credit Score
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.
While this may seem like a long time, it is better than waiting 7 to 10 years for the negative information to automatically fall off your credit report. Waiting 6 to 12 months to raise your credit score is worthwhile, especially when you want to own your own home.
Discover how lexington law helped a local couple get approved for a mortgage despite having bad credit. Visit their website www.creditforcouples.com to find out how they erased charge offs and collection items. You can also grab a free credit repair letter or call 1-866-246-7311 for a free consultation.
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