Buying a Home with a Low Credit Score
When your credit report is being reviewed in connection with a mortgage application, the lender will most likely have these questions on his or her mind: Is their credit score acceptable? Is their credit history good? How much income do they have? How much of a down payment will they be providing?
A huge down payment may dilute the negative effects of a spotty payment history or low credit score. However, be prepared for high fees and mortgage interest. In fact, the minimum score needed to purchase a home has increased in the past 12-18 months.
There is no way around having a low credit score. Even with a large down payment you will still need a good credit score to make home ownership a reality. Your goal should be a 758 average credit score to qualify for the lowest interest rates, according to CNN.com.
Raise Your Credit Score to the Minimum Necessary for a Mortgage
It is helpful and easy to request a copy of your credit report and read it over for negative entries. Mistakes and errors are often found on credit reports and this information can be disputed.
Your first step should be a dispute letter to the credit bureaus involved. Contacting the creditor directly to resolve the negative entry would be another way to start.
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.
This is because credit bureaus must spend potential profits on time and resources to investigate any dispute. The unfortunate truth is that some credit bureaus have found it cost effective to delay or ignore your dispute. Their hope is that you will give up on your dispute.
Will it Take Long to Boost My Credit Score?
Many people want to know how long it will be before they can see a difference in their credit score. In most cases, a fair estimate would be 6-12 months.
This is a long time but it certainly beats 7-10 years for the negative information to be dropped. It is beneficial to wait 6-12 months to raise a low score, especially when purchasing a home.
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 lexington law.
