Buying a Home with a Low Credit Score
When a lender considers approving your mortgage application, it goes something like this: What is your credit score? What is your credit history? What is your income? How much debt do you have? How much will your down payment be?
When attempting to purchase a home, a large down payment may minimize the negative outcome of a poor credit history. This large down payment, however, will not guarantee a good interest rate or lower fees. In addition, the minimum score required to purchase a home has increased over the past 12-18 months.
There is no way to distance yourself from having a low credit score. A good credit history is necessary to purchase a home, even if you do have a large down payment handy. According to CNN.com, a prospective homeowner’s credit score goal should be an average of 758 in order to obtain the lowest interest rates.
How to Obtain the Minimum Credit Score for a Mortgage
It is easy to get a copy of your credit report and review its contents. Many times there are entries which are inaccurate and can be disputed.
You can start with a dispute letter to the credit bureau(s). Otherwise, you will have to work directly with the creditor to resolve the mistake.
A well-written dispute letter will often result in the correction of the credit report, i.e. the removal of the negative entry. It is to be noted though that investigative techniques are often careless and error prone.
The reason for this is, when investigating any dispute, credit bureaus must necessarily spend additional resources and time to resolve the matter. Unfortunately, some credit bureaus feel it is more cost effective to take their time or ignore the matter altogether. It is their desire that you give up on your request to remove negative entries from your credit report.
How Long Will it Take to Raise My Credit Score
Often people want to know how long it will take to see an improvment in their credit score. This answer, of course, is dependent upon the individual situation, however, in many cases, an improvement may be seen by 6-12 months.
Although this may seem like an extremely long time, it is exceedingly shorter than waiting 7-10 years for the negative information to be erased. If you plan to purchase a home, it is imperative that you wait the 6-12 months to clear your credit report of any negative information.
We raised our credit scores from the upper 500 range to 745 and 763 in under six months and got approved for our dream home. See proof of our credit repair success at www.creditforcouples.com and get the real truth about lexingtonlaw.com.
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