How a Low Credit Score Affects Your Purchase of a Home
When a lender considers approving your mortgage application, it goes something like this: What is your credit score? What is your credit history? What is your income? How much debt do you have? How much will your down payment be?
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.
You cannot hide from a low credit score. In order to purchase a home, it is necessary to have a good credit history, whether you can provide a large down payment or not. A prospective homeowner should attempt to obtain an average credit score of 758 in order to receive the lowest interest rates, according to CNN.com.
Find Out How to Raise Your Credit Score and Improve Your Chances of Purchasing a Home
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.
You can start with a dispute letter to the credit bureau(s). Otherwise, you will have to work directly with the creditor to resolve the mistake.
Sometimes a cleverly crafted dispute letter will result in the removal of the negative entry. However, it is often the case that investigative procedures are careless and result in errors.
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?
Often people want to know how long it will take to see an improvment in their credit score. This answer, of course, is dependent upon the individual situation, however, in many cases, an improvement may be seen by 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 lexingtonlaw.com.
