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Bad Credit: Understanding What Happened and Why
By Karen LawsonMortgage Credit Problems Columnist
Having bad credit
isn't the end of the line financially. It's possible to get a bad credit
mortgage, and to qualify for other types of credit. The important thing about bad
credit is learning from the past and taking steps to avoid bad credit in the
future. Here are some steps that can help people with bad credit qualify for a mortgage
loan at reasonable rates.
Improving Bad Credit:
How to Get There from Here
It's a good idea to do some advance research and shop for a bad
credit mortgage loan before looking for a home. Homebuyers with bad credit may
assume that they only qualify for bad credit mortgage loans with very high
finance charges. This type of mortgage can lead to more financial trouble if
the loan terms aren't affordable, or are subject to rapidly increasing rates
and payments.
Potential homeowners should obtain their credit scores and credit
reports from the three major credit bureaus at annualcreditreport.com. Consumers
are entitled to a free copy of their credit reports once a year. Credit scores
are also available for a small fee; knowing credit scores in advance can help
when negotiating mortgage terms.
Dig Deeper: How and
Why Bad Credit Happens to Good People
A major factor in getting bad credit is uncontrolled spending.
Typically, compulsive spending can be caused by stress or other negative
influences. Understanding the reasons for getting deeply into debt can help
prevent future problems. Of course, bad credit can occur after an emergency or
catastrophic event. Reputable non-profit credit counseling agencies can help
people with bad credit negotiate affordable repayment plans and develop a
household budget and savings plan. Getting on track financially is the first
step toward getting a bad credit home loan.
About the Author
Karen Lawson is a
freelance writer with more than 15 years of experience in mortgage banking. She
holds BA and MA degrees in English from the
About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds an MA degree in English from the University of Nevada, Reno.
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