How To Increase Your Mortgage Bad Credit Rating?
Find Out How to Increase Your Bad Credit Rating and Get Your Mortgage Approved by a Mortgage Lender
Your credit rating is the reflection of how good or how bad your payment history actually is. If you’re planning to get a mortgage loan and buy a new house for yourself, then what mortgage lenders will look at first, is your credit rating.
Various credit bureaus have different systems for evaluating the credit rating. But there are some basic facts that are taken into consideration:
- Payment history
- Current debts
- Time length of credit history
- Credit type mix
- Frequency of applications for new credit
As long as there are different rules for evaluating your credit rating, it might be different depending on the bureau even if they all look into same credit report.
You should know that credit ratings range from 300 to 850. This three digit number is determined by various factors, such as the number of credit lines you have and the length your account has been open. If you pay on time (for some period of time), then your credit score will increase.
If you fall into category where your credit rating is below 300, which is considered to be very low, then you’ll have hard times finding a good mortgage lender with appropriate interest rates. But if you have a 850, which
is simply perfect, then mortgage lenders will be delighted and will grant your applications with ease and give you the best interest rates around.
If you’d like to increase your bad credit rating, which is below or 620, then the one thing you can do is plan ahead. You should spend money carefully. You should always pay the money on time. Keep your debts as low as you can, limit the number of your credit applications and do not ignore your bills.
Many people think that their bad credit rating depends on their income. It is actually all about your ability to pay the money and it has nothing to do with the income you get as some people think. Even if you get large sums of income, but spend the money somewhere else and don’t pay your bills then your credit rating will be bad, which in turn will result in your mortgage disapprovals.
So if you want to find a better mortgage lender that will give you more suitable interest rates, then keep the above information in mind and carefully plan your steps in order to avoid bankruptcy and increase your overall credit rating.