When obtaining a mortgage, a person’s credit history plays a major role in the decision. Having bad credit can be a deterrent to lenders, as it demonstrates, in some cases, a person’s inability to pay their debts on time.
Someone with bad credit may face difficulties when trying to obtain a loan, or they may run into high interest rates.
Bad credit mortgages are available, but the qualification process will be tedious. To a lender, someone with a credit score of 579 or below is considered bad credit.
It is possible to repair bad credit by paying old debt and managing the current debt in a responsible manner.
What does a bad credit score mean?
Borrowers with scores at or below 579 are considered to have bad credit. This means lenders will view them as a risk because they are viewed as likely to default. It is possible to fix a bad credit score. The goal is to get it above 669 and keep it there.
How can you fix bad credit?
Here are a few tips:
- Repair over time
You will not fix your credit overnight. It is a process.
- Automatic payments
One of the ways you can ensure your payments are made on time is to set up an automatic payment schedule or create an email reminder.
- Payments
Always try to pay above the minimum and set goals.
- Credit accounts
Avoid closing or opening any credit card accounts. Doing either can damage your current credit score.
You may want to explore getting a secured credit card and using it responsibly. This will help boost your credit.
For more information on dealing with bad credit mortgages, call the team at Mortgage Investors Group to see how they can help you.
