There are Things You Can do to Repair Your Credit Before a Home Search
There are many prospective home buyers who have been surprised by a bad credit report in the middle of the home buying process. You do not want to be one of those people who goes out, finds the perfect home, falls in love with, goes to request a mortgage and finds out that there are too many score-lowering marks on the credit report.
If you do not know your credit score, or if you have an idea that your credit score is not as good as it could be, then request a copy of your report from the same consumer reporting agencies (Equifax, Experian and Trans Union) that mortgage lenders use in order to determine your credit rating.
The reason to obtain these reports is to find out whether you have any marks lowering your report, and then to try to repair them before requesting a mortgage loan. A bad credit report does not mean that you cannot get a mortgage loan, but it does mean that the terms will me more burdensome. Although you may want to buy a home right away, it may be more prudent to wait a while and repair your credit.
When the reports arrive, look at them carefully and see whether there are any mistakes. Lenders and creditors will sometimes make a mistake when they send a report to a credit bureau. It is your responsibility to find these mistakes and get them removed from the reports. Mistakes in reporting do lead to bad credit, but you can get it fixed by contacting your creditor and requesting for the mistake to be corrected.
There are people who routinely pay their bills late, and this practice leads to horrible credit. If you are one of those people who leaves things for the last minute, then you are only hurting yourself and your chance of buying a home. When it comes to paying bills, you cannot procrastinate because it will show up on your credit report. One late payment is not a big deal and it can be handled by contacting the reporting agency and requesting removal.
However, if you are late every month in paying your bills, you are going to have to start paying on time. If you do this over a period of time, you are going to establish that you can pay your bills on time. You could then contact the CRA and request deletion of all those late-payment marks that are killing your credit.
When you contact the CRAs, do not just leave it at a phone call and forget about it. You need to follow up in writing and you need to be consistent and persistent. As you try to repair your credit by paying on time, stop paying with your credit cards and pay for everything in cash. If you are going to try to get a mortgage loan, you need to lower your debt burden.
Trying to repair bad credit may take months or perhaps one or two years, but it will be worth the time you wait. When you try to get mortgage pre-approval, a good credit rating will get you good terms on the low. In addition, a low debt burden might even allow you to borrow a bit more than you thought you could.
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