Repair Your Bad Credit and Realize Your Homeownership Dreams

Having bad credit makes life difficult and you might feel like you will never realize your dream of home ownership. The first thing you should do is consult your team from to see what you need to qualify for a bad credit mortgage. The next steps are to develop an action plan and start rebuilding your financial future.

Obtain and Study your Credit Report

Your credit report is what lenders use to determine your eligibility to obtain a mortgage or loan. While you may already have a basic idea of why your credit is damaged, you still need to review your credit report to ensure the information in it is accurate and to learn exactly what is holding you back. For information on obtaining your credit report free or for a nominal fee, please click here. Once you have received your report, review the information carefully to learn what is contributing to your low score. If any errors are found, contact the creditors or the reporting agency to have them corrected.

Create a Realistic Budget

Creating a realistic budget is like plotting yourself a road map to your financial success. First, list all of your expenses that are fixed costs. These are amounts that have to be paid each month and include things like rent, utilities, minimum monthly credit and loan payments, etc. Next, you’ll work on your variable expenses, which are items like food, gas and entertainment. Make sure these numbers are reasonable so you can develop a real plan that will work. Finally, subtract both sets of expenses from your total income so you can see if you have enough money coming in to work on your homeownership dream, or if you have to earn more.

Develop your Action Plan

The three things that affect your credit most are collections, late or missed payments, and high balances on your credit accounts. Use the following tips to create an action plan to turn around your bad credit rating and start working towards buying a home:

  • Make all of your payments on time without fail. Utilities, loans, credit cards and even parking tickets will get listed as late payments on your credit report.
  • Determine an amount you can put into savings towards your down payment. Start small if need be, but treat this savings as you would a debt and be religious about paying yourself.
  • Pay off any collections as soon as possible by using surplus found in your budget, or a second job. Once they are paid, contact the credit company and ask to have the collection removed from your credit report.
  • Once collections are paid, start with your highest-interest credit card and get it paid down. Balances of 75% or greater of your limit affect you negatively. If you can get your credit accounts down to 50% of your credit limits, this will improve your credit even more.
  • Do not make multiple applications for credit to try to consolidate your debts. Talk to a professional from first to learn your options. Every credit application leaves a negative impression on your credit report.

Repairing your poor credit will take some patience and diligence, but as your savings grow and your debts shrink, you’ll feel empowered by working towards your financial future. To learn about options such as bad credit mortgages or debt consolidation loans, contact your experts from

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