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 home buyers 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
November 21, 2021 - Can anyone apply for an FHA home loan? It’s true there are few limitations in terms of who may apply without being rejected out of hand. One scenario that disqualifies applicants for purchase or refinance loan approval are those where hopeful borrowers have FICO scores below 500.
November 18, 2021 - FHA home loans aren’t restricted to first-time homebuyers, but the FHA mortgage program is a good option for those who have never owned a home before--there is a low down payment requirement and more flexible FICO score guidelines for FHA mortgages.
November 16, 2021 - How much time do you need to start working on your credit to become ready to apply for an FHA mortgage? Focusing on your credit habits, credit card account balances, and more in the year or more leading up to your home loan is an important part of the process.
November 11, 2021 - If you are preparing for a large investment like a home loan, you’ll want to start looking at your credit reports early and pay attention to them over the long term. That is why it’s recommended to start working on your credit a full year or more in advance. You will definitely want the time.
November 8, 2021 - If you are considering a new home after a Chapter 7 or Chapter 13 bankruptcy has been discharged, you should know the rules that apply in such cases. Knowing them ahead of time will definitely help when you are ready to explore your options again.
