Does Credit Repair Help People Get a Mortgage Approval When Trying to Buy a Home
Buying a home is a huge step for anyone, and something that can bring you tremendous rewards in terms of your personal life as well as your financial future. But one thing that can stand in the way for many is getting approved for the mortgage that you need to actually make the house purchase.
Credit repair can help if the borrower plans ahead of time of actually beginning the home buying process. In most cases, the process of repairing, correcting and improving your credit report should be completed a year or so before making offers or shopping lenders. Attempting to join a traditional credit repair program while you are in the middle of the loan qualification process, can be a colossal mistake. Very few credit repair specialists have the knowledge and experience to have success while buying a home, so tread lightly.
Qualifying for a mortgage loan can involve a lot of different elements including things like:
Of these, credit score has been and is still one of the most important factors to pay attention to. The better your credit score, the easier it is to get mortgage approval and the better your loan terms and conditions will end up being.
As such, those with poor credit will often want to try to improve their credit score in an effort to improve their ability to get a loan and buy the home of their dreams. But does active credit repair really work to improve mortgage approval chances?
What Is Credit Repair?
The first step here is understanding the basics of what credit repair actually is. Essentially, what we're referring to is the process of taking steps to clean up your credit report in various ways. Paying off existing debts in full is one method here, but for many another option is to challenge negative items on a credit score.
For example, if you have an item on your credit score that you don't recognize, it could be disputed by you. If the company reviews it and determines that a mistake was made, you could have that negative item removed from your score. This kind of credit repair can help improve your credit profile so that you look more prepared to buy a home. Mortgage underwriters can look beyond a credit score in some cases.
The Question of Timing
At first glance, it's obvious that the better your credit score, the better your odds of getting a home loan. But there are a couple of things to pay attention to here. The main one is simply timing.
If you want to clean up your credit report, you need to begin well in advance of applying for loans or even seeking out a real estate agent. The reason is that by disputing claims, you could create additional issues on your credit report – if the company declines to remove items, your score could be impacted negatively. As a result, it's important that you don't try credit repair while you're in the midst of trying to get your home loan. Instead, take these steps at least a year in advance of seeking your loan.
If you'll do so, credit repair can have a big impact on your ability to get a home loan. The better your score, the better your chances of getting a loan and the better your loan terms will be. Ask the lending experts about bad credit loans for first-time home buyers.
The point here is that while credit repair is important, your credit score isn't the only factor lenders look at. Pay attention to everything and you'll figure out different steps to improve your chances of getting a good home loan.
The Bottom Line with Credit Repair