When you apply for a bad credit mortgage you could be making the best move in your life, or you could be making a mistake you'll regret for years to come. After all, buying a new home is bound to be one of the biggest events in your life. So how do you know if you're doing the right thing? Your first step is to check your credit report.
Your Bad Credit Documented
Banks and mortgage brokers use your credit report, among other things, to evaluate whether or not they will offer you a loan. Your credit report shows the history of debts you've had, your payment history, even places you've lived. Any credit cards you've had and car loans you've taken out will be documented. However, sometimes mistakes are made. There is also the threat of identity theft. Before you apply for a home loan, make sure that everything on your credit report is accurate -- especially if you've been told you have bad credit.
What Lenders Consider
There are a few key areas lenders will be looking at on your credit report. In a bad credit home loan situation this is where you need to protect yourself. Make sure the following accurately reflect your history:
- Your payment history: are there late payments listed?
- How many accounts you have and what kind: are all the accounts listed yours?
- Late payment history: late payments will be posted. Are they correct?
- Collections accounts: are any accounts you've paid off showing here?
Just because you're stuck with bad credit (for the time being) doesn't mean you need to get stuck with a bad loan. When you apply for a bad credit mortgage you want to make sure that you present the best picture possible. Check your credit report for any inaccuracies before you apply. You may find a few discrepancies that are fixable and end up improving your credit.
Mortgage Credit Problems Columnist
0 comments:
Post a Comment