Getting rejected by banks and mortgage lenders is a common problem for most consumers who wanted to buy a house with bad credit. There is no way you can apply for a home mortgage with a bad credit score – even if you have a good job or willing to pay more interests – as prime mortgage lenders are unwilling to accept higher risks. It’s time to do a credit repair.


How can I deal with unattractive interest rates?

A typical mortgage loan comprise of 15 to 30 years bond with a bank at an interest rate of 3 percent odd. The conscription comes with a hefty tag if your credit score is not good. Fixed or variable rates apply to most U.S. consumers under the federal laws.


Firstly, a credit score of 580 or above is entitled to FHA-backed loans by mortgage lenders and banks. It is possible for you to request for an FHA mortgage but at higher put down on a house as well as higher interest rates. Credit repair specialists sometimes refer you to better financing deals (such as rural area loans) instead.


Otherwise, you may consider repairing financial problems in your credit report. You can use the “debt snowball” strategy to eliminate unpaid credit cards or settle smaller credit problems. Recover your credit score in a natural manner. It does take time for recovery of fico scores, however.


Can I apply for a mortgage with bad credit?

Although the price to pay is going to be higher, you can (still) apply for a mortgage with bad credit. Banks do have special financing schemes (such as mortgage rebuilder loans) as credit help. The point of such services is to attract subprime borrowers to optimize their credit.


However, optimizing of individual history comes with an expensive requirement. You may have to fork out more than borrowers with good credit scores, i.e. paying 4.575 percent or more. Better scores help to reduce interest rates as financial institutions believe in statistics – the higher your credit score, the lower the risk of delinquencies and bankruptcies.


Stick to rebuilding your credit first. Good debtors knew that borrowing at an unattractive bank mortgage rate is going to (further) hurt credit scores in the long run. A missed payment, late payment, or failed payment leads to negative marks and comments in your credit report. Be prudent in undertaking bad credit loans as the requirements are stricter and harsher.


What can credit repair do for me?

There are many scam credit repair companies in town. Fortunately, the Federal Trade Commissions (“FTC”) and Consumer Financial Protection Bureau (“CFPB”) actively involves in issuing warnings for you as fraud protection. Identity theft is another prevalent problem.


Do not avoid considering using credit repair. If you need expertise in obtaining a home mortgage loan, or using home equity to repair credit, a professional company offering credit repair services is the right way. The agency can advise you in repaying of bad debts, negotiate with creditors and credit bureaus, and renegotiate with debt collectors on debt settlement.


The best credit repair companies have experience in communicating with banks and credit bureaus. A dedicated paralegal or case advisor can request for lower interests repayments as well as consolidation of outstanding balances and repay lower than initial principal. Credit monitoring is available for you to guard against identity theft problems too.


Rebuild my credit history fast

Indeed, credit repair always work for individuals who take responsibility in management of debt portfolio. A good mix of debt naturally rebuilds your credit history fast. Pull out your credit report first. Identity common errors and rectify the problems by sending credit dispute letters written by professional attorneys (such as section 609 attorney-written credit disputes) to reclaim rightful possessions.


Wait for at least 30 days for your creditors to respond. Lenders do need time to extract your data from their sources and recover the information. Negative information can be disputed but your creditors have the liberty to make the bad items appear on your credit reports again. Get the best credit repair companies to remove the problems; disputing with both credit bureaus and creditors.


No guarantees or promises should be made during the phase of rebuilding your histories. A good company (such as The Credit People, Lexington Law or Sky Blue credit repair) often helps you to oversee the entire repair progress. A personalized dashboard is available for you to check or update your credit repair.


Good to know about: How can I buy a house with bad credit?

Be patient! Bad credit report and score don’t happen overnight. The same goes for you to improve your existing negative financial health. A housing mortgage is a long-term commitment that prime lenders have to consider. It is at best your credit score can show the lenders on your risk of delinquency or bankruptcy risk. Remember that, you can buy a house with bad credit so long as you pay off mortgages on time and live within your means.

Note: You can buy a house with 60000 a year. Same for 100000 a year annual salary.

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Quote of the Day: “Why take up an expensive mortgage only to get a home repossession and mortgage foreclosure? – KIG Hall [2013-2018]”


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This article was originally published on April 03, 2014. It has since been updated.