If you have damaged credit, you need to know that you are not alone. In fact, many people are struggling with bad credit for various reasons these days. For instance, you may have been hit by the recession, and you lost your job without any warning. Or perhaps you may be working on your divorce processes.
And at times, a damaged credit could be as a result of a failed attempt at business, misappropriation of funds, financial mismanagement, or poor spending habits. In such cases, you may apply for a mortgage loan that will enable you to get through this murky financial crisis.
Nonetheless, you will need to demonstrate your willingness to improve your credit or at least try something that will show your capabilities if you want your application to be accepted by the lending institution.
It is important that you clean up your credit report. To do this, you might have to ask the three major credit bureaus to provide you with your credit report. Carefully scrutinize your report.
You need to scrutinize your report for unauthorized charges, inaccuracies, or any other errors. All credit holders have the right to dispute errors in their credit files. Essentially, this is the easiest and the smartest way to boost your credit score.
Be keen to look for any negative remarks on your credit report. If you find one that is older than seven years, do not hesitate to ask the credit bureaus to expunge it off your credit report. For example, you may have filed for bankruptcy before, like 7 years ago – the record need not to be included in your recent credit report.
The next thing that you need to do is to work towards improving your credit score. You have to ensure that you have no standing debts in any of your accounts. You also need to submit your payments on time and regularly and this will tell your creditors that you take your credit rating seriously.
If you have damaged credit; you cannot afford to make another late payment. You also need to learn to keep your credit usage as low as possible. You need to struggle to use less than 20 % of your credit limit.
It is also best if you can check out for the government grants. These loans are the best deals for those with bad credit. You need to find out if you qualify for the same. What is more, compared to the commercial lenders and banks, the government loans are less stringent on clients with bad credit. Their interest rates are incredibly low.
When applying for your mortgage, you need not give multiple applications to various lenders. Too many inquiries can send a negative impression to your potential lender. It can also cause a dramatic drop on your credit score.
If you are careful to follow these tips, you are going to get accepted by your lender when applying for your mortgage.