There are three major consumer reporting agencies (CRAs), or credit bureaus, that mortgage companies use to assess a buyers credit rating: Experian, Equifax and Trans Union. Credit scores typically range from 300 to 850. For home loan purposes, a score of 650 or higher indicates a good credit history and will make it easy for you to secure a mortgage. If your score falls between 620 and 650, your borrowing capability will be examined more closely. And if you rate below 620, you may have a credit crisis.
When youre in the market to buy a home and discover that you have bad credit and your score is low, dont despair. Although it may delay the purchase of your home, there are ways to repair your bad credit rating so that you can still qualify for a home mortgage with a decent interest rate.
To evaluate your credit rating youll need to obtain copies of your credit reports from the various agencies. Examine them carefully to see what transactions are lowering your score.
A special note about bankruptcies: A bankruptcy can lower your credit score by 200 points or more. Repairing bad credit following a bankruptcy is beyond the scope of this article. ...
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