Trying for a Mortgage? What You Need to Know about Credit Repair

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Ready For a Mortgage? Learn How Credit Repair Can Help

( – One of the most important purchases a person can make in their life is a house. Qualifying for a mortgage is difficult or impossible for many Americans, especially those with bad credit. If you’re looking to buy a home, there are steps you can take to repair your credit so you can get where you need to be to get a mortgage. Don’t let a poor credit score stand between you and your dream home!

Minimize Recent Hard Inquiries

Mortgage lenders will likely hesitate to offer you a mortgage if you have many hard inquiries. A hard inquiry happens when you apply for a new line of credit with a credit service. Since many hard inquiries probably means you are unable to get the amount of credit you need, it is a major red flag to mortgage lenders that you are not financially secure enough to afford homeownership. Opening too many credit cards may indicate that you do not have enough financial capital to keep up with a mortgage payment. For best results, it is better to wait until those hard inquiries are older before applying for a mortgage.

Improve Payment History

One thing that lenders consider when looking over your application is your payment history. No one is perfect, but having too many missed payments can seriously jeopardize your ability to qualify. Recent data is considered more highly than old data, so being extremely careful to avoid making late payments can help you recover your credit score faster. Adding new monthly payments can help you cancel out older data, as long as you do not miss them. Just be sure that you are able to keep up with them. It does you no good to accrue several monthly payments if you are going to fall behind in them.

Lower Your Credit Utilization

You should never max out your credit usage. A maxed-out credit limit tells lenders that you cannot get enough credit to keep up with your financial needs. Since a mortgage is one of the highest-priced financial obligations you can make, having maxed-out credit can make it much harder to obtain one. Credit repair services can help you determine which credit accounts are making the most impact on your credit report. Paying off as much as possible instead of just the minimum amount and increasing your credit limit on your cards can help you lower your overall credit utilization.

Additionally, you can open up a new card, increasing your available credit limit. Just be sure you do not have too many hard credit inquiries.

Fix Errors

You may be unaware of this, but credit reporting agencies are not perfect. It is not uncommon for negative items to be added to your credit score by mistake. If your score is lower than you think it should be, looking at all the negative items can help you find and dispute errors. Since the federal government requires that all information on your report to be fair and accurate, you can dispute these errors with the landlord, credit company, or other lenders who made them. While you can do this yourself, it may be easier for you to hire a credit repair service to help you, as they will likely have skills and knowledge which allows them to navigate this process faster and easier than you. This will also help ensure that you are not missing any errors that might not be easily identifiable.

A legitimate credit repair company can help you correct errors as well as make better financial decisions; this may be one of the most effective ways of quickly repairing your credit, making qualifying for a mortgage easier. Just be aware of companies offering deals that seem too good to be true, as these companies may be scammers.

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