Improve Credit For Mortgage

How I Can Improve Credit For Mortgage Loan Approval

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will discuss how I can improve credit for mortgage loan approval. Mortgage loan programs have minimum credit score requirements for their loan program. Some homebuyers may not meet the minimum credit score requirements on FHA, VA, USDA, or conventional loans.

Besides meeting the minimum credit score requirements to qualify for a mortgage, it is best to maximize your credit scores. The higher your credit scores, the lower your mortgage rates. There are quick fixes on how to improve credit for mortgages. In this article, we will go over how to improve credit for mortgage approval. We will also review some quick fixes for boosting your credit scores so you can get the lowest possible rates.

How Long Does It Take To Improve Credit For Mortgage Loan Approval?

YouTube player

The single biggest factor in mortgage companies’ base pricing of mortgage rates is the borrower’s credit scores. There are other loan-level pricing adjustments that affect mortgage rates. However, the borrower’s credit scores are the single largest factor on which mortgage rates. If you are planning on applying for a mortgage, the best word of advice we can give you is to start working on boosting your credit scores. It is not hard to improve credit for mortgage qualification and to get the best lowest rates.

It does take time. Your credit scores will not go up overnight. If you diligently work to improve credit for mortgage approval, getting your scores in the high 600s or 700 FICO plus may take three to six months. Having low credit scores today is a hurdle that cannot get fixed. Those who have low credit scores are not alone. There are ways to improve credit for mortgage loan approval in a few simple steps.

How To Improve Credit For Mortgage Fast

YouTube player

Millions of Americans have low credit scores. Lenders have minimum credit score requirements. Many homebuyers do not meet the minimum credit score requirements to qualify for a mortgage. The good news is that there are many ways to improve credit for mortgage loan approval. Having low credit scores is not a permanent problem. It is not if you will qualify for a mortgage but rather when.

There are many quick fixes for improving and boosting credit scores. We will show you how to improve credit for mortgage loan approval. Consumers with low credit scores do not have to hire expensive credit repair consultants. Whatever a credit repair professional can do, they can do it themselves.
How to Improve Credit For Mortgage Fast

Should I Use a Credit Repair Company To Improve Credit For Mortgage?

We highly recommend you do not use credit repair companies to improve credit for mortgage. Outstanding collections and charge-off accounts over 24 months old have little to no impact on getting a mortgage loan approval, nor does it affect your credit scores. Any derogatory credit tradelines, such as late payments, have little to no impact on your credit scores.

Credit repair consultants can do more damage than good. Credit repair companies often charge a lot of money for services that do not require a lot of talent. Many of those who want to improve credit for mortgage may not need the help of a credit repair consultant. Ways to improve credit for mortgage loans may include paying down credit cards or adding new credit.

Using Secured Credit Cards To Improve Credit For Mortgage Loans

Consumers with no credit or limited credit may have to add more credit. Adding three secured credit cards can be the quickest fix to Improve Low Credit Scores To Qualify For Mortgage. Or on other cases, the credit bureaus may be reporting incorrect information on the credit report. That may be the cause of low credit scores. Some consumers are victims of identity theft. They might not realize that someone else is using credit and personal information to open up new credit.

Creditors may be reporting wrong information to the credit bureaus. A common mistake on credit bureaus was late payment when you were never late. Other mistakes on credit bureaus are credit tradelines that do not belong to them. We will cover the various ways. Improve low credit scores to qualify for mortgages in the quickest amount of time.

Strategies For Improve Credit For Mortgage With Low Credit Scores

YouTube player

The chances are consumers with no credit, or prior bad credit who decided not to get new credit and pay everything in cash will have lower credit scores. Even with great payment history in the past, consumers with no revolving credit will have lower credit scores. Consumers with periods of bad credit due to a job loss, bankruptcy, foreclosure, or medical issues which have not gotten new credit can easily boost their credit scores by adding new credit.

Secured Credit Cards are the easiest and fastest way of building credit

How Can I Qualify For a Mortgage With Bad Credit?

Mortgage lending guidelines state that after a bankruptcy, foreclosure, deed-in-lieu of foreclosure, short sale, or periods of bad credit needs to have re-established credit. Many lenders have credit tradeline overlays. Three to five established credit tradelines seasoned for at least 12 months are what lenders want to see. The common sense question is how can I get new credit to re-establish my credit with no credit due to bankruptcy and foreclosure, and recent collections?

What Will Affect My Chances of Getting a Mortgage?

No unsecured credit provider will grant credit to a consumer who has just gone through periods of bad credit. The best way to add positive credit is by getting secured credit cards. Secured credit cards are the fastest and easiest way to get or re-establish credit after a bankruptcy, foreclosure, deed-in-lieu of foreclosure, short sale, or periods of bad credit.

Depending on the consumer, each secured credit card can initially boost a person’s credit score by at least 20 or more points. As the credit payment history ages, the person’s credit scores will keep increasing. It is recommended that the consumer gets at least 3 to 5 secured credit cards with at least a $500 credit limit.

Paying Down Credit Cards Will Boost Credit Scores

YouTube player

Maxed-out credit cards are the main reason for lower credit scores. This is a temporary problem. Credit scores will go back up the following month once credit card balances are paid. The credit utilization ratio is how much of the available credit on the credit card is used and counts as 30% of the overall credit score.

If the credit balance is close to the credit limit, the credit score will be low. The higher the available credit limit is, the higher the credit scores. Not having a greater than 10% credit balance is strongly recommended.

Will Recent Late Payments Affect My Chances of Getting a Mortgage Approval?

One recent late payment on a credit card, installment loan, or any other credit can lower credit scores by at least 50 or more points. Late payments will be reported on the credit reports for seven years. Consumers with good long-term relationships with a creditor who just forgot to make a payment and that payment is reported 30 days or more late contact the creditor and ask them if they can, as a one-time courtesy, remove that late payment.

Consumers without prior late payment with that particular creditor, which was a one-time mishap. The creditor will most likely show goodwill and have that late payment removed.

If the customer service representative refuses, ask to speak to a supervisor.

Improve Credit For Mortgage With Pay For Delete

YouTube player

Borrowers who must pay off an old collection account by their lender due to their overlays can do so with a pay-for-delete. The creditor will remove the collection or charge-off account if consumers pay the outstanding debt.

This action is known as pay for delete and is done all the time. A collection agency or creditor does not care about what is on the credit report as long as they get their money, so this should be a quick fix. They are not going to volunteer for a pay-for-delete. We need to demand it and use it as part of the negotiation.

Improve Credit For Mortgage By Paying Bills on Time

YouTube player

Borrowers need to realize how important it is to pay minimum monthly payments on time.  One late payment will not only devastate and drop credit scores, but when it comes to qualifying for a mortgage, it can set borrowers back 12 months.  Many lenders will not approve a mortgage loan to anyone with at least a 12-month on-time payment history.  Some lenders will go as far as requiring a 24-month on-time payment history.

Borrowers do not have to pay outstanding collections and charged-off accounts to qualify for mortgages with lenders with no mortgage overlays. Gustan Cho Associates has no mortgage lender overlays on government and conventional loans. Please call us or text us at The Gustan Cho Team at 800-900-8569 or text for faster response to qualify for a mortgage. Or email us at

Related> 9 Fast Fixes for your Credit Scores

Related> Credit cards for bad credit

Similar Posts