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
April 19, 2024 - We write about many details of FHA home loans, and if you are on the path to homeownership for the first time, it helps to know some of the facts and fiction surrounding these home loans before you start looking for a home, a lender, or applying for pre-qualification.
April 17, 2024 - There is plenty of bad information about home loans in general and FHA loans specifically. You may encounter some of these in the wild when searching for a lender and a home to buy with an FHA mortgage.
April 16, 2024 - Home loans have many similar features. They require down payments, have appraisal standards, and may have rules on how you can use the property you buy. How do home loans compare to one another? We examine some of the major issues in this article.
April 14, 2024 - When a first-time homebuyer starts researching their options for a mortgage loan, it’s easy to find bad information and half-true information online, even from otherwise trusted sources. Some publications do their due diligence and review FHA loan rules to ensure accuracy.
April 12, 2024 - There are important choices to make when deciding whether to rent or own, but making the most informed choice is crucial. Some don’t think about the advantage of a fixed mortgage payment over rent that potentially increases year to year.
