Identify and Fix Credit Report Errors
Things to Do Before Applying for an FHA Loan
When the Federal Housing Administration announced rule changes to help strengthen finances and protect against risk, one of the biggest changes was requiring a minimum FICO score of 580 to qualify for the attractive 3.5 percent down payment on mortgage loans.
Know Your FICO Score
Applicants who fall below the 580 score will have to put down a 10 percent down payment in order to qualify for an FHA mortgage loan. For many applicants hovering just below that threshold, this policy change may serve as a great opportunity to take close look at their credit report and improve it.
The FICO score is actually comprised of your credit scores from the three national credit bureaus--Experian, TransUnion and Equifax. If your FICO score is just below the FHA limit, you should take the proper steps to check your credit report with the three agencies.
How to Check Your Credit Report
There are many ways people can check their credit scores. There are many online resources for people wishing to identify where they stand with lenders. Once you've gotten your report from the three bureaus, carefully examine your credit history for anything out of the ordinary, such as unauthorized loans taken out in your name, incorrect late payment records or anything that seems questionable, no matter how minor you think it is.
While your credit reports and credit score are what lenders use to judge your reliability in paying back loans, errors in your reports can happen. Make sure they aren't hindering you and your life's plans.
Correct Errors as Soon as Possible
The longer you wait to correct your credit history, the more potential damage errors can do. Prevention is key, so if you don't use a credit monitoring service, you should consider one. If you do find any errors, send a letter to the bureau that reported it and clarify with them why you think it is incorrect. Be sure to provide proof and any other documentation that will help your claim.
If you're already in the process of applying for an FHA loan, notify your lender of your dispute with your credit report as well because your credit score indicates your creditworthiness. It never makes sense to suffer at disadvantages that were the result of something you didn't do.
Helpful Advice - Credit Scores and Loans
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FHA Loan Articles and Mortgage News
July 3, 2018 - For maximum financing and the lowest possible down payment requirement under the FHA loan program’s rules, borrowers should come to the FHA mortgage loan application process with a credit score of 580 or higher.
July 1, 2018 - Are you new to the home loan process and need tips for buying or building a home using an FHA mortgage? There are three basic areas you should consider immediately once you decide for sure that you want to apply for a home loan.
June 18, 2018 - Borrowers with existing FHA mortgages often consider refinancing their loans. Some may refinance because they want to get a lower payment or switch the term of their loan to a shorter (15-year refinance loan) or longer (30-year refinance loan) term.
June 12, 2018 - Are you looking for a house to buy with an FHA loan,worried about your credit, and looking for ways to get ahead with FICO scores and your credit history? Learn how to help yourself become a more informed and credit-worthy mortgage loan borrower.
June 5, 2018 - Regarding luxury items and features in a home, the first and most basic issue is the existence of the pool, barbecue pit, or other similar upgrades. FHA loan rules do not forbid the purchase of a home with these features, but they must meet FHA standards where applicable.
FHA.com Reviews
FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!
