FHA Loan Tips for Improving Credit
Track Your Credit Score and Stay on Top of Problems
While FHA loans are known as a great service for people looking for help buying a house, applicants can make the process even easier if they take steps toward ensuring their credit history is in tip-top shape. The agency advises prospective homebuyers to approach FHA loans with their best possible credit history to eliminate any potential risk of not qualifying.
Whether you're looking for a loan to mortgage a new house or to refinance a house you already own, it makes the most sense open up all your options with an optimal credit rating. The FHA recommends having a satisfactory payment history of at least one year before applying for a loan.
Credit Tips for Your FHA Loan
Here are some tips to help you on your way:
- Take a Close Look at Your Credit Reports
You don't know what could be hurting your credit score unless you actually check. Get your credit reports from the three national credit bureaus--Experian, Equifax and TransUnion--at no cost and comb them over for anything suspicious or questionable. - Dispute Inaccuracies
If you find errors on your credit report, notify the reporting bureau in writing so you have a record. Provide any additional records or evidence you have to support your dispute. - Find Professional Help
The FHA recommends applicants with credit problems get help from a Consumer Credit Counseling program. A credit counselor can help you get back on track. - Bankruptcy / Foreclosure
If you've suffered from a bankruptcy or foreclosure in the past few years, you might still be able to qualify for an FHA loan. Develop a satisfactory payment history, re-establish good credit and meet the other FHA requirements.
While your credit history is just one of the many factors that make up your eligibility for an FHA loan, it is no doubt one of the most important. Having a higher score not only helps you qualify, you can also benefit from the low 3.5 percent down payment on mortgage loans available to applicants with a FICO score over 580. FHA approved lenders don't take your credit history lightly, and neither should you.
Credit Scores for FHA Loans
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FHA Loan Articles and Mortgage News
September 24, 2023 - What do you need to know about FHA loan limits? Some borrowers look at the loan limits, thinking that’s the total amount that the lender will offer them if the loan application is approved and expect to borrow that maximum amount.
September 22, 2023 - How do you know if you are being too hasty when applying for a home loan? We aren’t talking about whether or not you should buy a particular home or not, but rather whether you as a potential borrower have given yourself enough time to prepare for the application.
September 17, 2023 - Credit scores and what it takes to be approved for a mortgage are among the most frequently asked-about topics related to FHA home loans. What does Experian recommend a borrower do to better qualify for an FHA mortgage or any other type of home loan?
September 15, 2023 - How much money should a first-time home buyer save for a down payment? It depends on the type of home loan you want, whether you want to avoid mortgage insurance, and whether your FICO scores are high enough to qualify for the lowest down payment.
September 12, 2023 - CBS News MoneyWatch published an article in the last days of August 2023 noting that mortgage rates are hovering in the 7% range, with no real end in sight to the higher interest rates reported at press time. This article lists some of the top ways you can get a lower mortgage rate.
