| Almost 99% of the homes purchased in the United | | | | agency. Once you have each of the items marked on |
| States today are bought using mortgage financing. | | | | each of the credit reports, write a letter to each of the |
| Since almost all mortgage lenders use credit scores to | | | | credit agencies disputing any of the negative or |
| make a lending decision, borrowers with bad credit | | | | inaccurate items that appear on your credit report. |
| may be denied by a lender, or given loan terms and | | | | Provide a complete explanation as to why these items |
| conditions that are not as favorable as those | | | | should be removed from your credit report, it is |
| borrowers who have good credit. The better the credit | | | | inaccurate or the information does not belong to you. |
| score, the better the interest rate and terms the loan | | | | Take Action to Improve Your Credit Rating |
| may have. In five easy steps you can improve your | | | | It is also imperative to address the negative, but |
| bad credit in preparation for buying your home. | | | | accurate, items on your credit report. These items |
| Obtain a Copy of Your Credit Report Before Applying | | | | may include late payments, unpaid payments and |
| for a Loan | | | | items in collection. Contact each of the creditors and |
| You may not be aware of what is showing up on | | | | collection agencies handling the bad debt. Talk with |
| your credit report. In order to know the situation you | | | | them to see what kind of arrangements you can work |
| are dealing with and what may need to be fixed, the | | | | out with them to either payoff the debt completely or |
| first step you should take before applying for a | | | | to make payments to start paying off the debt. It is |
| mortgage loan is to request and obtain a credit report | | | | important to remember that whatever arrangements |
| from each of the three credit agencies, TransUnion, | | | | you make with the creditor need to be in writing and |
| Experian and Equifax. You can order a copy of your | | | | you need to stick to them. For example, if you say you |
| credit report via phone, fax or online. Once you receive | | | | are going to pay $25 a week on a debt, then it is |
| each of the credit reports, it is important that you | | | | imperative that you pay $25 a week. Any disputed |
| thoroughly review the information. Go line-by-line | | | | items removed by the credit agencies will trigger a |
| looking for any inaccuracies in the information listed | | | | new credit report to be sent to you. As these negative |
| and all of the negative credit items, late payments, | | | | items disappear, your credit score will go up, improving |
| non-payments, discharges and write-offs. Highlight or | | | | your credit and preparing it for you to buy a home. |
| mark items that need attention. | | | | If you take action now, when you find that home you |
| Make sure to do this for each credit report because | | | | will be able to qualify for your mortgage without any |
| information may vary from credit agency to credit | | | | problems. |