Best Ways To Rebuild Credit To Buy A Home
What are the best ways for individuals to rebuild their credit in order to buy a home?
The recent years of crisis have bruised the credit of many millions of Americans and US residents. Many see this as a roadblock to obtaining a purchase mortgage, buying a home, and enjoying all of the benefits of homeownership. So if you know your credit has taken a beating, or think it might not be as strong as it once was, what are some of the best ways to rebuild credit in order to become a strong mortgage applicant?
Tips on Fixing Bad Credit to Buy a Home
Know Your Credit Status
Don’t just assume what your credit report and score looks like. It could be significantly worse than you thought, and you could stand to lose a lot by rushing into a home purchase contract without being aware of it. Or your credit could be substantially better than you imagined and not require waiting or repair at all.
So start by obtaining a copy of your credit report and reviewing the information.
Consult a Mortgage Loan Officer
Consulting a mortgage loan officer is one of the smartest moves you’ll make in this process. In fact, a loan officer can obtain a copy of your credit report and pre-qualify you for a purchase mortgage loan right away, or at least skillfully guide you on the best moves for optimizing your personal credit to obtain the home loan and home you really want. They can help you understand which items are worth investing in fixing, or not, and may even be able to refer you to the most reputable and reliable credit repair specialists if needed.
Then it’s time to challenge the incorrect and erroneous items showing up on your credit report. Obviously incorrect negative items can be challenged directly with creditors and the bureaus. Often this is a simple (even if lengthy) process. Or your mortgage broker or loan officer may be able to help you expedite the process.
Fixing Bad Credit Items
Creditors and debt collectors, including big banks have frequently resorted to illegal practices in chasing down past due accounts. In some cases this can be a huge gift in surprise. Some individual have not only had the related negative credit items removed due to these practices, but have won million dollar lawsuits for compensation. A good attorney can help with this.
Establish Good New Credit
Sometimes dealing with the old and negative can be unproductive and a poor use of financial and time resources. Often the best and most profitable move might be simply to press ahead and establish new good credit. Proceed cautiously in order not to damage credit further, but consider secured credit cards, store cards, lines of credit, and car loans to rebuild credit.
Some individuals might also find the only thing they need to do to claim the great credit rating they deserve to buy a home is to have existing positive, but unreported items added to their credit reports. This may include utility services, private mortgages, rent, personal loans, and merchant accounts.