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
January 18, 2021 - 2020 was a newsworthy year for many important reasons, but for the housing market one of the biggest headlines involved volatility in mortgage loan interest rates for both government-backed mortgages like FHA loans and VA mortgages as well as for conventional lenders.
January 8, 2021 - Points can be paid up front by the borrower or rolled into the loan amount depending on the loan and the lender, and some wonder if they should purchase points as they are planning and saving for the new loan. When is it a good idea for borrowers to purchase discount points?
January 3, 2021 - If you are considering your first home loan, there are some great resources you should use in your planning and saving stage of the mortgage. No new borrower has all the information they need to buy a home at their fingertips in the early days.
January 1, 2021 - Whether you’re looking at a starter home or you want to build a house on your own lot to retire in, there are many options with FHA mortgages and not all of them involve purchasing someone else’s suburban house; you can choose from condo units, mobile homes, and more.
December 30, 2020 - If you want to build a home on your own land or on land you buy in conjunction with your construction loan, you should know there are a variety of construction mortgages out there and not all of them are the same.
