Purchasing a home is a rewarding accomplishment for many families. However, it is your decision to buy a home of your own versus renewing a rental agreement. If several credit blemishes have kept you away from the housing market, a licensed loan officer at Perennial Funding may be able to provide a variety of recommendations toward improving your credit rating.
Review Your Credit Status
Knowing your current credit status can empower you to take action. In fact, consumers are encouraged to visit the Annual Credit Report website to review their credit status. With a few adjustments, you might be on your way to improving your credit.
When you apply for a home loan, a mortgage lender will order a tri-merged credit report that reflects data from Equifax, TransUnion and Experian. Therefore, it is important to review your credit status with each of the aforementioned credit bureaus. You can obtain a free credit report from each of the credit bureaus through the Annual Credit Report website.
Disputing Errors on Your Credit Report
Essentially, you should be prepared to find some errors on your credit report, as a large percentage of consumer credit reports contain inaccuracies. Review information on your credit report, such as your date of birth, social security number, address history, employment information, unauthorized accounts, balance discrepancies or other erroneous items.
If you find errors on your credit report, you can write a letter to the respective credit bureau to dispute inaccurate information. You should also provide copies of documents that support your reason for filing a dispute, such as receipts, billing statements or creditor letters of satisfaction.
Settling certain aged debts could temporarily lower your credit score. It is a wise idea to speak with a mortgage advisor prior to paying off a collection account or a debt that is more than two years old.
Shopping for a Home With a Low Credit Score
Borrowers with premier credit scores are generally able to secure attractive mortgage terms. If you are planning to shop for a home with low credit scores, you might qualify for above-average mortgage interest rates. Affordability could be an issue, and you may lose some of the purchasing power that might be available for a borrower with comparable income.
Subtle adjustments to your credit score might enable you to obtain competitive mortgage terms. Working with an experienced loan officer is an excellent way to improve your credit to buy a home. Before shopping for a home, you are encouraged to obtain a mortgage pre-approval letter.
Contact Perennial Funding today at (888) 826-4856 to explore your opportunities for homeownership.