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Clean up your report for a home loan

By Faye Mergel
Published: Wednesday, May 19th, 2010

PIXTAL-00015236-001Most consumers find buying a home a problem with the loan rates based on credit scores. Experts say that consumers can improve their credit reports by taking precautions to improve their scores and can get loans at lower rates. 

Consumers can improve their credit reports by following certain steps 

Applying for a free credit report

Consumers can get free credit report from one of the three credit bureaus. Consumers get one free per year from each of the three companies. Consumers with low scores are not eligible for loans. 

Calculate credit scores 

Consumers are to get their credit scores after they have possession of their credit reports. Credit reports are provided by FICO for all three credit bureaus and are the basis on which loans are granted. Consumers who have low credit scores are not eligible for loans and consumers who have an average score of 700 or above have a good interest rates and loan schemes. A difference of 100 credit points will cost a consumer up to a couple of thousand dollars a year. Credit score are fixed on many factors: if bills were paid on time; debt amounts owed; credit history in detail; new credit accounts; and the various types of credit a consumers owes. 

Try consciously 

Consumers are encouraged to keep their credit limit stable by paying off old bills frequently so as to prevent credit cards from crossing their limits. When credit cards pass their credit limit it cause serious damage to the credit history of the consumer. Consumers are to maintain a stable credit limit so as to avoid bad credit scores. 

Choose your bank 

Banks now offer to view credit scores and credit reports and advice consumers on ways and means to improve and fix their credit scores. Bankers are best when they are recommended by a friend of family member. Fixing your credit score can make you eligible for a loan. 

Beware of your mortgage 

Bankers help consumers calculate how their mortgage value holds up. Most people qualify for a loan and then get a loan pre-qualification letter to get their loans later. This allows them to borrow a specific amount from the bank to be eligible for a house loan. 

Consumer who have low credit scores can follow the above mentioned steps and improve their credit scores in order to be eligible for a loan and to have good interest rates and loan payment options.

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