3 Things to Do If You Are Denied a Mortgage with Bad Credit

• April 19, 2017

It is always painful to be denied a mortgage with bad credit. It creates a feeling of worthlessness since you are unable to sustain good credit ratings to secure the finances you need for a mortgage. However, being denied a mortgage loan is not the end of the world, and the good news is that there are a few things you can do to salvage the situation and make another attempt at acquiring a mortgage loan. Here are three things you need to do in the event that you are denied a loan:

Determine the reason for denial

It is your right to know why you were denied the mortgage loan. Ask the loan officer or the institution for the specifics relating to your denial. Most of the time, you will be denied a mortgage loan due to having a low credit score or a low debt-to-income ratio. If you know the reason, you can then go ahead and work to improve it and make another attempt.

Work on your debt-income ratio

Suppose the reason for denial was because you have too much debt compared to your income, then you should work hard to improve this. Consider the debts you have and a plan on clearing them so that this ratio can be better and allow you to apply again.

Work to remove the negative items from your credit report

If the denial was due to negative items such as late payments, charge offs, and collections, you can think of how to remove such items so that your score can improve before you decide to try again.

Use the services of a professional to help you clean up your credit score

Finally, if you didn’t want to go through the trouble of having to deal with every item dotting your credit history, then you can just hire a professional and have them do the job for you. You must, however, be sure that you are choosing the right credit repair services if you want good and quick results.