Get Approved For A Mortgage With Bad Credit

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The Credit Review
August 10, 2020 Credit Repair
Get Approved For A Mortgage With Bad Credit

Why Was I Turned Down For A Mortgage?

A mortgage is an important step to help finance your new home and being denied for one can contribute to the stressful and time-consuming process of moving into your new home.

There are a variety of reasons you may have been turned down by lenders, including:

  • Employment status or outstanding debts. Lenders check to make sure you have a steady source of income for monthly payments and you may have been turned down due to your income or debts. For certain loans like the FHA mortgage, there is a requirement that you need at least two years of consistent employment.
  • Mortgage fraud. This is a less common issue that takes place when a borrower gives false or exaggerated information to the lender about their financial situation.
  • Inadequate savings. Because lenders look at your savings, find homes in price ranges that suit you and your budget.
  • Your credit score. This is the most likely reason for being denied a mortgage.

What Is The Best Credit Score To Get A Mortgage?

Why does your credit score matter so much? For starters, a mortgage may be the largest loan you ever take and includes a down payment, insurance, and taxes. The better your credit score, the lower your interest rate is -- which can save you thousands in the long run.

The minimum credit score to qualify for an FHA (Federal Housing Administration) loan isn't a set number and fluctuates depending on the state of the economy. When the economy is in a recession, it's normal for lenders to enforce more restrictions. During these times even an excellent credit score may not be enough to qualify you for a loan.

It can be difficult to qualify for a loan with a credit score of 580 or less, although there are personal loans available for those with bad credit. However, if your credit score is considered good or excellent, you can take out a loan with low interest rates.

What Can I Do To Raise My Credit Score?

The difference between qualifying for a loan and being rejected might be a few points. Lenders may also be hesitant to give you a loan if you have no visible credit history, but you can work to build and improve it:

Identity Guard
Year Founded
1996
Credit Score Required
-
Pricing
Starting at $8.99/month
BBB Rating
-
Trial Period
30 days
IdentityIQ
Year Founded
-
Credit Score Required
-
Pricing
6.99
BBB Rating
-
Trial Period
-
TransUnion
Year Founded
1968
Credit Score Required
None
Pricing
Starting at $19.95/month
BBB Rating
A-
Trial Period
7 days
PrivacyGuard
Year Founded
1973
Credit Score Required
None
Pricing
$19.99/month
BBB Rating
NR
Trial Period
14 days
CreditID123
Year Founded
2018
Credit Score Required
None
Pricing
Starts at $9.99/month
BBB Rating
-
Trial Period
Free 1-day trial period

Although it may take 1 to 3 months to see any changes in your credit history, many lenders use a different reporting system called rapid rescore to find your new score only a couple of days after the changes are made.

Not sure where to start your credit repair journey? Contact our trusted credit repair companies for more information.

Credit Saint
Year Founded
2004
Credit Score Required
None
Pricing
Starting at $79.99/month
BBB Rating
A+
Money-back Guarantee
90-day 100% money back guarantee
Number of Customers Helped
-
Lexington Law
Year Founded
1991
Credit Score Required
None
Pricing
Starting at $89.95/month
BBB Rating
-
Money-back Guarantee
None
Number of Customers Helped
500,000
The Credit People
Year Founded
2001
Credit Score Required
None
Pricing
Starting at $69/month
BBB Rating
A+
Money-back Guarantee
60 days
Number of Customers Helped
200,000
CreditRepair.com
Year Founded
1997
Credit Score Required
None
Pricing
$99.95/month
BBB Rating
-
Money-back Guarantee
None
Number of Customers Helped
-
Sky Blue Credit
Year Founded
1989
Credit Score Required
None
Pricing
$79/month
BBB Rating
A+
Money-back Guarantee
90 day moneyback guarantee
Number of Customers Helped
-

Can I get a mortgage with bad credit?

It is possible, but the interest rates will be much higher since lenders know they are lending to borrowers who have had trouble paying their debt in the past.

How can I improve my credit?

  • Consider credit repair and contact a credit repair service
  • Always pay your bills on time
  • Deal with past due accounts
  • Reduce your credit utilization
  • Keep old credit accounts open
  • Open new credit (but avoid applying for too much new credit)
  • Monitor your credit

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