How to Improve Your Credit to Qualify for a Mortgage

There are many reasons you should worry about your credit score and work to improve your ratings. Unless you are financially independent it will be very difficult to get home without a mortgage loan.

repair credit in CincinnatiTo help in determining the level of risk in giving mortgage loan approvals – mortgage companies use 3 major credit bureaus, Equifax, Trans Union and Experian. Credit scores range from 300 to 800. To qualify for mortgage loan, many mortgage companies will require a credit score of 640 and above; The Mortgage Network of Ohio is not one of those companies, we offer FHA, VA & USDA mortgages that start at 550 Score. However the better your credit score the better your interest rate. Instead of living with a bad credit score and anxiously applying for a mortgage taking steps to repair your credit can be the best solution.

Although credit repair may delay your dream to own home, it will repair your credit rating so that you can qualify for a home mortgage with a more descent interest rate. Some of the reasons you should repair your credit are;

Ability to purchase your dream home.

Home ownership has always been a dream for many people. But bad credit can keep you far away from your dream. You may have big income but most lenders won’t give home mortgage until you have repaired your credit. If approved, a higher interest rate is the unavoidable penalty.

Increase your chances of getting mortgage.

No one feels good when your credit request is denied. People with a good credit score have a better chance of getting a home mortgage with more favorable interest rate and terms.

Save money.

Your home is probably among the biggest investment you will make in your life. Repairing your credit allows you to access lower interest rates credit.

Tips to repair credit and qualify for mortgage loans.

1. Mortgage credit diagnostic. The first step to improve credit score is to review your credit reports. Obtain copies of your credit reports and analyze them with your mortgage broker. The importance of credit diagnostic is to review what has been reported and identify any issues in your credit score.

Bankruptcy will lower your credit ratings by more than 200 points. If you have charge-offs, contact creditors and make arrangements to pay the old debts. After repaying charge-offs, submit a written letter on their company letterhead to us in order to change the status in your credit report.

If you have late payments, contact creditors to discuss the situation. It is advisable to make a written request to have the late payment isolated.

Reporting mistakes – at times when reporting to the bureau, creditors can make mistakes. It is your responsibility to spot and repair such mistakes that are ruining your credit score.

2. Credit improvement. If the credit score was low due to negative information, find a mortgage broker that will help you to counter balance the negative information and increase your chances of getting a mortgage loan.

But if a bad score is due to un-paid debts or past due balances, you will have to address them before raising your credit score.

Other ways to improve your credit score include;

Pay monthly bills on time.

Pay off debts and increase the amount of credit lines

Open a secured credit card but avoid canceling any credit card, borrow no more than 40% of your limit and pay on it on time.

Convert credit card debts to personal loans- credit card debt has more damage on your credit score.

Credit card repair is not like a race that gets instant results, it can take from a few days to a few months depending on your situation. Contact Jeff at The Mortgage Network of Ohio for assistance in repairing your credit.

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