If you are in the home buying market one of the major qualification hurdles you will have to jump over is whether you have the credit scores to qualify for a mortgage or not?
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While qualifying for government backed loan like a VA loan or FHA loan is less difficult than Fannie Mae conventional mortgages when it comes to credit scores, you will still need to have decent scores to be considered for a mortgage.
If you have good scores great (say greater than 640), but if you don’t – do you know how to get your credit scores up or do you need to hire a credit repair company?
Credit scores are a function of what your credit report shows, and what your credit report shows is supposed to be a representation of your credit history and situation. Therefore, if you have some late payments and maxed credit cards you most likely have lower scores. Conversely, if you have low balances to your limits and have never missed any payments then you will probably have high credit scores.
Credit reports are created based on the information that your creditors report about you to the credit bureaus. Once the bureaus get your information, they then build your credit report. Once your credit report exists, then it is possible in most cases for the credit bureaus to calcuate your credit scores.
In the complete process from creditor records to the credit bureaus to your credir report, sometimes mistakes happen which can result in incorrect information showing up on your credit report. As such, some of this information, if it were the right information, could be harmful to your credit scores.
Now that you know that credit scores are based on the information contained in your credit report you should see that improving your credit scores can happen in a few ways.
First you can take proactive steps like not missing anymore payments and letting time pass from when you had your missed payments, or you can perhaps payoff some of your credit accounts (without closing the credit accounts).
Second, you can correct incorrect information on your credit report.
In the first case, there’s not much someone else can do to help you (unless they gave you the money to pay off your debt). In the second case, you can challenge the incorrect information yourself of your can hire someone to do it for you. You will have to make that choice yourself.
If you are working with a competent loan officer who has been in the mortgage business for awhile they ought to have some insight as to what you can do to improve your scores without having to pay someone to do it for you. In some cases you won’t have to work too hard to get your scores to move up enough to allow you to qualify for a home loan, but in other cases you may have a lot more work to do. For this situation you may want to consider having someone do it for you. Again, you will have to make that choice.
In the end, better scores means better home buying options you will have to decide how to get your scores up.
