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. Far instance, you may be finding it hard dealing with your current situations due to the recession, and you may have lost your job unexpectedly. Or perhaps you may be working on your divorce processes.
More often than not, damaged credit may result from misappropriation of funds, poor spending habits, financial mismanagement or even a foiled business. 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 vital that you clean up your credit card. To do this, you may have to request the three major credit bureaus to furnish you with your credit reports. Carry out a thorough evaluation of your report.
Make sure it contains no errors, unauthorized charges or inaccurate information. All credit holders have the right to dispute errors in their credit files. Such drastic measures are considered the best way to boost your credit score.
Be sure to check out for 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. Maybe you had filed for bankruptcy ideally, the record should not be shown on 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 need to be punctual in submitting your payment to show your creditors that you are seriously concerned about your credit rating.
If you have bad credit, you can’t 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.
You may also need to check out if the government gives loans. These loans are great for those with bad credits. You may need to find out if you qualify for the same. What is more is that these government loans are less stringent as compared to the commercial lenders and banks. Their interest rates are incredibly low.
When applying for your mortgage, you shouldn’t give submit several applications to various lenders. Too many inquiries can send a negative impression to your potential lender. It can further reduce your credit score.
If you are keen to follow these simple steps, you are likely to have your mortgage application accepted by your lender.