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Tips on Getting a Mortgage with a Low Credit Score

If you have a low credit score, are you worried that you will have a difficult time acquiring a mortgage due to bad credit? There are certain steps you can take to help you improve your credit score and also improve your chances of getting a mortgage. Read on to learn some important tips.

1. Get a free credit report

The first thing you need to do before applying for a mortgage is to acquire a free copy of your credit report. You are entitled to a free copy each year, and it will be beneficial for you to thoroughly go over your report to check for mistakes that could be giving you a lower credit score. If you do find discrepancies on your report, contact the credit bureau to find out how you can fix any errors.

2. A steady income will help

When you can show evidence of a steady income over the course of a number of years, it will help to raise your credit score and also raise your chances of getting a better mortgage rate.

3. Improve your credit history with on-time payments

By making payments on time, you will be proving that you are capable and dependable, regardless of what may have happened in your past.

4. No more credit cards

Make every effort to pay off the balance on your current credit cards. You do not want to open any more accounts, no matter how much you may be tempted. The last thing you need at the current time is more debt.

5. Work out a comfortable budget

You need to work out a budget for paying your bills on a monthly basis and stick to it. This will be especially important when you have mortgage payments to meet each month.

6. Pay balances in full when possible

If it is possible to pay your credit card balances in full, do so. This will go a long way in improving your credit score and your chances of getting a mortgage.

7. Use credit sparingly

Credit card debt can happen so easily when you use plastic for many expenses. If you use your credit cards sparingly, you will have less to pay each month. What you do need to pay out on a monthly basis will also be more manageable.

8. Check out various lenders

When applying for a mortgage, check out a variety of lenders to see what options are available to you. Some lenders may be more willing to work with you than others, but you must do your research and check out a number of them before you will find the one that is best for your situation.

If you have been making every effort to improve your credit score, it will show on your credit reports and will indicate to lenders that you can handle the responsibility of monthly payments. The FHA, in order to encourage more individuals to buy homes, has also made it easier for those afflicted with bad credit to qualify for mortgage loans.

This is a guest article by Claire Atkinson. Click here to visit Kanetix, the mortgage comparison website that Claire writes for.

Originally posted 2013-10-07 17:24:07.

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