How To Buy Milton Real Estate With Imperfect Credit


  1. While it is better to buy a home in Milton when your credit is perfect, just because you have a few flaws on your credit report doesn't mean you can't qualify for a loan. The key is to do what you can to repair your credit before you start looking for the right loan. Read on to learn some credit repair techniques that will get you the best interest rate.

    The first place to start is by securing a copy of your credit report. You are entitled to one free copy of your credit report each year from each credit bureau, so take advantage of this free service and get a copy of all three credit reports. When you have your reports, you will need to go over each entry to make sure it is correct.

    Pay special attention to negative items and if you find any, dispute them with the credit bureau. In many cases they can be removed from your report. If you have collection accounts that are new, see if you can pay them off or settle them. If you have plenty of old negative accounts, find out when the drop off date is and wait until they are gone before you apply for a loan.

    At the same time, you want to put positive items in your report. Most mortgage lenders want to see three positive tradelines on your credit report, so if you don't have them, you need to apply for some new credit lines. If your credit is poor, you can apply for secured credit cards. These cards require a security deposit, but they report just like revolving credit card accounts and they will slowly raise your credit score each month.

    While you are in the credit rebuilding phase, don't make any late payments and keep your credit utilization on each card low. Don't use more than 30 percent of your new credit limits. Rebuilding your credit isn't immediate. It takes time, so you will have to be patient. You might not see a huge jump in your score until six months have gone by.

    Ideally, you should have a credit score of at least 620 to be considered for a home loan. The higher you go, the lower your interest rate will be. If you have to pay a high interest rate due to your credit score, your monthly loan payment could be several hundred dollars higher, which can really add up. It is worth doing the work to get a low interest rate.

    As your credit score starts to go up, you can apply for unsecured credit cards and cancel your secured card. Most secured card companies will return your security deposit in about three months. Now you are ready to apply for a home loan.

    Make sure your credit is strong when you are ready to buy Milton real estate. Be prepared to wait six months if your credit isn't the best. The wait is worth it.