The Effects of a Low Credit Score on Purchasing a Home

Buying a Home with a Low Credit Score

Have you ever considered what a lender thinks when he or she reviews a credit report in relation to approving or denying a mortgage application? Well, the most common answers would be: What is their credit score? How is their credit history? What is their income? What is their debt to income ratio? Will they be providing a substantial down payment?

The negative effects of a less than stellar credit history may be minimized by a large down payment; however, you will still likely pay more in fees and end up with a high mortgage interest rate. The fact is that in the past 12-18 months the minimum score necessary to buy a home has increased.

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.

Raise Your Credit Score to the Minimum Necessary for a Mortgage

With minimal effort you can obtain your report and see exactly what is there. Often there will be mistakes or errors that you can dispute.

Your first step should be a dispute letter to the credit bureaus involved. Contacting the creditor directly to resolve the negative entry would be another way to start.

A well-written dispute letter will often result in the correction of the credit report, i.e. the removal of the negative entry. It is to be noted though that investigative techniques are often careless and error prone.

While investigating your claim, credit bureaus must spend time and man hours to resolve the dispute. Taking their time or ignoring the dispute is more to the liking of many credit bureaus. They hope you will throw in the towel and give up!

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.

Although this may seem like an extremely long time, it is exceedingly shorter than waiting 7-10 years for the negative information to be erased. If you plan to purchase a home, it is imperative that you wait the 6-12 months to clear your credit report of any negative information.

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 lexington law.