Gustan Cho Associates are experts in guiding home buyers and homeowners with boosting their credit scores fast and on how to rebuild credit for mortgage approval. Having poor and bad credit is not permanent. Having bad credit and low credit scores is like having a bad hangover. With time, it heals. As time pass, your bad credit will have less of an impact on your credit scores. Over 30% of American consumers have credit scores lower than 620 FICO.
USEFUL LINK: How To Rebuild Credit After Bankruptcy
Mortgage Approval With Credit Scores Down To 520 FICO
The team at GCA Mortgage has helped thousands of people boost their credit scores and rebuild their credit. We are experts in helping people rebuild credit after bankruptcy and/or foreclosure. Most of our borrowers with a recent bankruptcy have boosted their credit scores to over 700 FICO in less than one year after the Chapter 7 Bankruptcy discharged date. In the following paragraphs, we will guide you on a step-by-step journey on how to rebuild credit for mortgage approval.
USEFUL LINK: How To Boost Credit After Bankruptcy
Mortgage Approval With Collection Accounts
Gustan Cho Associates gets countless inquiries daily on how to rebuild credit for mortgage approval. The team at Gustan Cho Associates has helped thousands of borrowers re-establish and rebuild their credit so they can qualify for a mortgage with the lowest possible rates. There are minimum credit score requirements to qualify for a mortgage. You do not need to hire a credit repair company to qualify for a mortgage. Credit repair companies can do more damage than good. You cannot have credit disputes during the mortgage process. Before you try to repair your credit so you can qualify for a mortgage, contact us and we will guide you on how to rebuild credit for mortgage approval.
USEFUL LINK: How To Re-Establish Credit To Qualify For a Mortgage
Guide on How To Rebuild Credit For Mortgage Approval
We have prepared this guide on how to rebuild credit for a mortgage approval to help borrowers with bad credit and lower credit scores. Old derogatory credit tradelines do not hurt your credit scores. When you first are late or get derogatory credit, it will drop your credit scores. However, as your derogatory credit ages, it will have less impact on your credit scores. You can qualify for a mortgage with late payments, collections, charged-off accounts, repossession of auto, and other derogatory credit as long as they are a year old or older. We have created a step-by-step guide on how to boost your credit scores and how to rebuild credit for mortgage approval.
USEFUL LINK: How To Boost Your Credit Scores Fast
How To Improve Credit To Qualify For A Mortgage With Bad Credit?
Rebuilding and re-establishing credit requires patience and commitment. We will show you a user-friendly easy guide to the road of great credit so you can qualify for a mortgage at a great rate. The focus bad credit borrowers need to focus on is going forward, they need to monitor their credit report just like they monitor their bank accounts. Credit repair is not required to the road for great credit. Whatever a credit repair company does, you can do it yourself, but better. The foundation to great credit starts with the fundamental and a change of your habit.
Monitoring Your Credit through Free Credit Report
Here is the basic habit you need to implement:
- Monitor your credit report by signing up for a credit reporting service like Credit Karma
- Credit Karma and other credit report providers will alert you if there are any changes on the credit profile of your credit report
- Outstanding collection and charged-off accounts do not have to be paid to qualify for owner-occupant primary residence home mortgages.
- You do not have to pay outstanding collection and/or charged-off accounts to qualify for a mortgage unless you are being threatened with a lawsuit.
- You do not want a judgment entered against you (See the useful link on a mortgage with outstanding judgments)
- Do not dispute derogatory credit tradelines unless you have documentation the creditor made an error.
- Do not dispute for the sake of disputing hoping the derogatory credit item will fall off.
- Credit disputes need to be removed during the mortgage process (See useful link below)
- Always set aside a portion of your earners for reserves
- Have a series of different types of credit tradelines
- Your credit report comprises the different kinds of credit you have
- Secured credit cards are the easiest and fastest way of increasing your credit scores and rebuilding your credit profile
- Check your credit report for any errors and make sure it is updated
- Never close out an open revolving credit tradeline even though you may not use it
- Credit bureaus base their credit scoring model on the number of aged credit tradelines you have
- As your credit tradelines age, the stronger your credit profile, and the higher your credit score
By the time you have read this guide on how to rebuild credit for mortgage approval, you will realize how easy and simple the step-by-step process to the road to great credit is. This guide was carefully created to make the steps of rebuilding your credit as practical as possible to make the steps in this guide part of your lifestyle. If you read this guide and are committed to rebuilding your credit, you will religiously monitor your debts like you do your bank account. Always have auto payments signed up with your credit to deter you from overlooking any debts due which it can be detrimental to obtaining credit, especially qualifying for a home loan with competitive rates. Hopefully, after reading this guide on how to rebuild credit for mortgage approval, you will realize how important credit is and make a commitment to religiously practice the steps in this guide for keeping a solid credit profile and high credit scores at all times.
USEFUL LINK: Mortgage Approval With Judgment
USEFUL LINK: Mortgage Approval With Judgment
Steps to Rebuild Credit Explained
How Do Lenders Use Credit Scores In The Mortgage Loan Application Process
Lenders use credit scores to determine if borrowers qualify for a mortgage loan program. Every mortgage program has its own minimum credit score requirement. There are two types of mortgage requirements for government and conventional loans. All mortgage lenders need to have borrowers meet the minimum credit score requirements of the loan program. Lenders can have higher credit score requirements higher than the minimum agency mortgage guidelines called lender overlays. Not all lenders of FHA, VA, USDA, and conventional loans have the same credit requirements. Gustan Cho Associates is one of the very few mortgage companies with no lender overlays on government and conventional loans.
USEFUL LINK: What Are Lender Overlays?
Minimum Credit Score Requirements on Government and Conventional Loans
There are three different government loan programs: FHA, VA, and USDA. Conventional loans are called conforming loans because they must conform to Fannie Mae and/or Freddie Mac Guidelines. Mortgage lenders can have higher lending requirements above and beyond the minimum agency mortgage guidelines of FHA, VA, USDA, Fannie Mae, and Freddie Mac. Besides using credit scores to set minimum credit score requirements, lenders use credit scores to price mortgage rates. The lower the credit score, the higher the rate charged by lenders. HUD, the parent of FHA, requires a 580 credit score for homebuyers to qualify for a 3.5% down payment FHA loan.
What Is The Minimum Credit Score Requirements To Qualify For a Mortgage
The first mortgage requirement is all borrowers need to meet agency mortgage guidelines of FHA, VA, USDA, Fannie Mae, and Freddie Mac. The second mortgage lending requirement is set by the individual mortgage lenders which are higher credit requirements above and beyond the minimum agency mortgage guidelines. The second type of guidelines by the individual lender is called lender overlays. Most lenders have lender overlays on government and conventional loans.
USEFUL LINK: Mortgage Loan Programs For Low Credit Scores
Mortgage Approval By New Lender After Loan Denial
Over 75% of our borrowers are folks who could not qualify elsewhere. Gustan Cho Associates is a mortgage broker licensed in 48 states. We have the states, the mortgage products, and competiive rates. There is no ther mortgage lender in the nation that has as many wholesle mortgage lenders and the number of traditional and non-prime mortgage loan programs. We have a national reputation of being able to do loans other lenders cannot do. Gustan Cho Associates have been called as a one-stop mortgage shop from our borrowers and realtor partners.bBorrowers who get an approve/eligible per automated underwriting system (AUS) can get denied by a mortgage lender with lender overlays. If borrowers meet the minimum agency mortgage guidelines but get a mortgage denial, they can choose a lender with no lender overlays to qualify and get approved.
USEFUL LINK: Mortgage Approval After Denied By Lender