A Low Credit Score Can Affect Your Purchase of a Home

Buying a Home with a Low Credit Score

When a lender considers approving your mortgage application, it goes something like this: What is your credit score? What is your credit history? What is your income? How much debt do you have? How much will your down payment be?

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.

There is no way around having a low credit score. Even with a large down payment you will still need a good credit score to make home ownership a reality. Your goal should be a 758 average credit score to qualify for the lowest interest rates, according to CNN.com.

How to Obtain the Minimum Credit Score for a Mortgage

It is helpful and easy to request a copy of your credit report and read it over for negative entries. Mistakes and errors are often found on credit reports and this information can be disputed.

You can start with a dispute letter to the credit bureau(s). Otherwise, you will have to work directly with the creditor to resolve the mistake.

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.

This is because credit bureaus must spend potential profits on time and resources to investigate any dispute. The unfortunate truth is that some credit bureaus have found it cost effective to delay or ignore your dispute. Their hope is that you will give up on your dispute.

Will it Take Long to Boost My Credit Score?

Many people want to know how long it will be before they can see a difference in their credit score. In most cases, a fair estimate would be 6-12 months.

This is a long time but it certainly beats 7-10 years for the negative information to be dropped. It is beneficial to wait 6-12 months to raise a low score, especially when purchasing a home.

Discover how I raised my credit score from 582 to 745 in four months with the help of Lexington Law. Learn the truth about quickly and effectively deleting bad credit at www.creditforcouples.com.