To buy a house, you will probably need to get a mortgage loan from a bank and getting a loan can be difficult if you have credit that is less than great. If your credit is not as good as it needs to buy, you will need to devote some time to fix your credit before you apply for a loan. The amount of time you will need for this purpose will depend on what is on your credit report. Here are some factors to consider as you begin working on your credit.
You should give this task at least six months
The first thing to understand is that you cannot improve your credit score overnight. This is simply impossible. Instead, it will take time, and you should give it at least six months; however, some people are able to do it faster, while others will require more time than this. The main point is that you should not expect to be able to make your credit score increase significantly in just a few days or weeks; it will take some time for this to happen.
Bankruptcies or foreclosures will take longer
If you have a bankruptcy or foreclosure on your credit report, you should understand that there are waiting periods for getting loans. While these events will stay on your report for around 10 years, in most cases, you may have to wait anywhere from two to five years after the event happened before you will even qualify for a mortgage loan.
Steps that may help improve your score
Finally, you may need to utilize some of these steps to improve your credit score:
Disputing errors – When there is an error present on your credit report, you must go through a process that involves disputing the error. This process takes time and requires a separate dispute with each credit bureau.
Paying off debt – If you owe too much money compared to the credit limits you have, part of improving your credit could involve paying off debt. Another option is to add more credit lines to your name so that the percentage you owe is less due to the added lines of credit.
Adding new accounts – Adding new accounts and paying the bills on time could also be a good step for improving your score.
Getting a loan to buy a house is a necessary step in the home-buying process, and your interest rate will be closely tied to your credit score. If you would like to learn more about improving your credit or the loan application process, contact a mortgage broker.