Qualifying for a Home Loan with Bad Credit
Everyone knows that having good credit is important for securing a home loan. But not everyone has a sparkling borrowing history. Does this mean you can’t qualify for a home loan with bad credit? Not necessarily. There are many different options available to you. A seasoned mortgage professional will be able to help you identify the areas in your credit profile that can be improved, thus boosting your credit score. In other words, while you can certainly do things on your own to repair your credit, developing a game plan with an experienced loan officer will help you to avoid some pitfalls that could prove detrimental to your score.
Check Your Reports
It’s important to know your credit score before you apply for a loan. Once a year, you can receive your credit score from the three national credit reporting agencies for free. It is also important to note that the score given by Equifax, Experian, and TransUnion may differ slightly from bureau to bureau. Knowing your score across every bureau is essential, because your median score will be used when evaluating your application.
Dispute Any Errors
Your credit score may be lower than it should be because of reporting errors or issues on your reports. When searching your credit reports, make sure that all of the information is accurate and correctly reflects your credit history. If you find any errors, such as payments that were incorrectly reported as late, you can dispute the error to return your score to its correct number.
Work on Building Your Score
Before you apply for a mortgage loan, you may want to spend some time on building your score as much as you possibly can. Once you’ve thoroughly scanned your credit reports and disputed errors, you can start building habits that will benefit your score. The most helpful actions you can take to improve your score include:
- Paying your bills, loans, and other debts on time
- Holding off on applying for new credit accounts that could bring negative inquiries
- Keeping your credit balances as low as possible
Search for the Right Loans
If you have credit that isn’t where you would like it to be, you aren’t alone. There are countless homebuyers who have successfully qualified for mortgage loans without having the best credit in the application pool. In fact, some loan programs were designed to make low range credit applicants more eligible. Some of the most common credit-friendly loans include HARP 2.0, FHA, and USDA Rural Development.
Find an Experienced Mortgage Firm
If you want to learn more about building your credit score before applying for a loan or are ready to start applying today, you can count on the trusted experts at Butler Mortgage. With over 25 years of experience in helping homebuyers of all credit ranges, we can find the right loan for your wants and needs. Contact us online or by calling 407-931-3800 for a complimentary consultation.