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FHA Bad Credit Mortgage and Credit Repair


Your credit score is a number that is derived from reports that are supplied by the three credit bureaus. They are Experian, TransUnion, and Equifax. In most situations the middle score of the three numbers is used to determine what your score is, and your eligibility for a home loan. Middle is represented by putting the scores supplied by each bureau in numerical order, then excluding the highest and lowest scores, leaving the middle score or number. Each program, and lender can be a little different, but this is mostly correct.

FHA is called the bad credit home loan, or bad credit mortgage because the program allows for lower credit scores than many other loan programs. There are minimum requirements in place so it is important to know what your scores are and what need to be done, if anything, to raise the scores to an acceptable level. To many people this seems like a very daunting, expensive, and lengthy process, but it is not true. At its principal parts it is quite easy.


What to do if you find your scores are too low to qualify for an FHA bad credit home loan?

First, don’t worry. A way of raising your credit scores is to look at yourself in the manner that the reporting bureaus look at you. One, what is going on today? The other what happened in the past?

What is going on today.

The fastest way to lower your credit scores is to be currently behind on payments. The best scenario for anyone that is looking to raise their scores is to have at least three open lines of credit that are being paid on time. If you are late on a payment it does not mean you cannot get a loan, but it does mean you are going to see your scores drop some. Again, the best way is 3 open lines of credit paid on time. Examples are student loans, car loans, personal loans, credit cards, and retail lines of credit. Don’t go into debt in order to get a loan, but if you don’t have three lines today and you want better scores you can get a couple of low credit line credit cards (secured credit cards are great – ask your specialist by registering now) or a small line of credit from a furniture or appliance store.

What happened in the past.

Again don’t worry, there are tips and strategies here. Our specialists have seen people who thought they had the worst credit situations make progress and buy a home within a year. This is part of the reason that we want you to get access to your own credit report  as you should be educated about what is there. Everyone who reports on your credit must supply their own contact information, and you can contact them. Items that are negative on your credit report can be removed, disputed, and updated to raise your scores. This takes a little bit of time (10 minutes per item?) and some future follow up. Think of it as investing a few hours into your home before you buy it. There are also very good, reputable groups that can help you with this. Rest assured, all credit situations can be rectified, with most being easy.