Get a Mortgage by Cleaning Up Your Credit

Improve Your Credit Score

credit scoreUnderstanding how credit scores work is the key to getting approved for a home loan. However, many people go about applying for mortgages without have the slightest clue about what their credit reports are saying about their credit worthiness. Your credit history and the resulting score it produces are like pure gold. Thus, a high credit score should always be your goal. Once you achieve it, protect it at all costs, as good credit is your ticket to living a more enjoyable and stress free financial life.

But what if your credit score and credit history are not as tip top as you would like them to be? Fear not. For this is not a permanent situation. The economy of recent years has been hard on most everyone, so there is no shame in a lower than preferred credit score. The trick is tackling it now and doing everything you can to get your head out of the sand and meet your credit history and obligations head on. Only then will you be in the condition to make positive financial headway.

Take a look at some of these suggestions for improving your credit score.

First, pay your bills in a timely fashion. Come on. This one is simple. If you owe, pay. Lenders and their number crunching android like underwriters do not see a human being when they process loans. What they see is your credit history, your credit score, your tax filings, and possibly your bank account history for the past two months.

These number crunchers are not going to care one way or another about the personal troubles you’ve endured. They want to see positive signs that when you sign you name on the dotted line to pay back the loan you’ll do just that. Next, take a look at any outstanding or late debts you may have to deal with. If you have any collections, call the folks you owe right now and make an arrangement with them to get on some sort of payment schedule.

Another thing you can do is take a look at your credit cards. Try and use no more than 25 percent of your allowable limit. So, if you have a $1,000 limit, use only $250 at a time and then pay it down. Maxing out a credit card is a sure sign that you have credit liability issues. So don’t do it.

The last thing you should do is contact Experian, Equifax, and Transunion. Get reports from each of them and look them over. If you see negative items on your reports that are correct, then take care of these issues as soon as you can. If you see items that are incorrect, ask the credit reporting agency to remove them. By law, they have to respond to you within 30 days of your request.

Taking these steps will surely get you on the road to credit recovery. You don’t need a counseling agent. You can do it yourself. Once your credit is good shape, be sure to stay diligent about credit usage so it can stay that way. When you feel you are in a position to apply for a home loan, seek out a few mortgage calculators. They'll be of great help to you as you make your plans for home ownership.

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