Tips to Fix Your Credit Score for Mortgage Loans

• April 22, 2017

If you don’t have a good credit score, it will be very difficult for you to apply successfully for mortgage loans, unless you are considering going for a bad credit mortgage loan. To avoid rejections, it is vital to get your credit score in order before you apply so that you may have increased chances of getting approved.

Here are some of the tips you can use to fix your credit score if you intend to opt for a mortgage loan:

Request a goodwill adjustment for negative items on your report

The most important thing you should do before applying for a mortgage loan is to remove negative items from your report. Be sure to remove items such as charge offs, late payments and collections from the report. This act alone will tremendously increase your credit score.

Secondly, you should consider writing a letter of goodwill from the original creditors for the negative items. In the letter, you should explain your situation, why the negative items occurred, and explain that you are trying to get a mortgage loan, and then ask for forgiveness and removal of the items from the report. It sounds strange but works like a charm and will help you tremendously when applying for a mortgage loan.

Reduce your credit card balance to below 15%

Your credit card usage is another thing that mortgage lenders will be looking at and you don’t want to make the application if one or more of your credit cards are maxed out. It is highly recommended that you pay up the credit cards so that by the time you are making the application, the balance is below 15%.

Don’t apply for new loans or credit cards at the same time

Be sure not to apply for new car loans or credit cards at the same time you are making your application for a mortgage loan. Such applications are likely to show up on your credit report as a hard inquiry, simply because you are seeking out credit and at the same time you are applying for the loan, and this may erode the lender’s confidence in you.