If you have damaged credit, you need to know that you are not alone. In fact, a lot of people are struggling with damaged credit due to varied reasons. For instance, you may have been hit by the recession, and you lost your job without any warning. Or perhaps you may be working on your divorce processes.
A bad credit is sometimes caused by poor financial management systems, foiled business, misuse of funds or even poor spending habits. If you are sinking deep into these financial quagmires, you may have to salvage yourself by applying for a mortgage loan that will soften up your problems.
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 important that you clean up your credit report. To do this, you may have to request the three major credit bureaus to furnish you with your credit reports. You need to examine it carefully.
Ensure that your report does not have any errors, inaccurate information or unauthorized charges. You have every right to dispute any error that you find on your credit files. Essentially, this is the easiest and the smartest way to boost your credit score.
You also need to be keen to look for any negative remark on your credit report. If you discover a 7-year-old negative comment, do not take that sitting, rather, ask the credit bureau to expunge it from your files as soon as possible. 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 also need to submit your payments on time and regularly and this will tell your creditors that you take your credit rating seriously.
If you have bad credit, you can’t afford to make another late payment. It is also best if you can minimize your credit usage at all costs. You need to struggle to use less than 20 % of your credit limit.
You also need to check out if the government offers 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. Submitting numerous mortgage applications can attract negative feeling, and this can turn away your potential lender. It can also cause a dramatic drop on your credit score.
If you follow these simple guidelines, you are likely to get your mortgage application accepted by your financial institution.