You Can Buy a Home with a Low Credit Score
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?
Large down payments can help you overcome negative information on your credit history or a less than desired credit score. For the duration of your mortgage, however, you will pay higher fees and interest.
Unfortunately, you will need a good credit score to purchase a home. A huge down payment will not hide a low credit score.
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.
Obtaining the Minimum Credit Score for a Mortgage
Your credit score can be a very confusing topic. However, if you focus simply on removing any bad credit information, you can make good progress.
If you have derogatory information on your credit report, the “experts” say you can’t remove it. It is in their best interest that you think you have to wait 7-10 years for the bad information to disappear, in order to raise your credit score.
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.
You can start to correct the errors by writing a dispute letter to the credit bureau. Another option is working with the original creditor to fix the mistake.
More often than not, a well-worded credit dispute letter will resolve the error. In some instances, errors and sloppy work, hinder the investigation process.
This is because some credit bureaus don’t want to spend the time or resources to investigate the dispute. It is simply more cost effective to ignore or delay your dispute.
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
A frequent concern is how long will it take to improve a low credit score. Although every persons situation is unique, if you are looking for a fairly drastic improvement, then you should expect anywhere between 6 to 12 months before you report is clean.
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 deleted 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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