If you know your credit is poor, but you want to buy a house in the near future, you’ll need to know the facts about a bad credit home loan. First, it might be more challenging to find a lender that’s willing to offer you a reasonable loan, it can be done. But before you start shopping around, investigate your credit score and clean up your credit report as much as you can.
In order to check your credit score and report, you’ll need to obtain a free copy. This will be easy to do online. You should obtain credit reports from the three major credit bureaus – Experian, TransUnion and Equifax. These are the bureaus lenders are most likely to look at when considering your application.
Once you obtain your report, you need to learn to read it. Figure out what if any misinformation or outdated information it still contains. You will then need to work on having these items removed or corrected, which involves notifying the credit bureaus reporting the information of corrections that need to be made in writing, and sending along proof to support your claims as needed. If you have outstanding debts, pay them off.
You can hire a company or individual to clean up your credit history if you choose, but if there are only a few negative items, there’s no reason you can’t handle this yourself.
Getting your credit report in the best shape you possibly can may take several months or even longer, but it will be well worth the effort. The difference it may make in terms of your bad credit home loan could save you thousands and thousands of dollars in interest and fees.