How Do I Fix a Bad FICO Credit Score for a Home Loan?
Overview Bad credit serves as a deterrent for lenders. Whether it’s an old debt in collection or a bunch of maxed-out cards, mortgage brokers don’t look kindly on low FICO scores. After a rash of loose lending requirements, the mortgage lending industry now expects borrowers to show up with the best credit score possible. While it takes time and patience to raise a lackluster score, with the right fixes, a borrower can bring his FICO score up to an acceptable level. Step 1 Pay off credit card debt. Banks like to see a borrower with no more than 30 percent of her possible credit in use. Any more than that takes a toll on the FICO score. Increase your payments and work to pay off each card. MSN Money says, “While most debt gurus recommend paying off the highest-rate card first, a better strategy here is to pay down the cards that are closest to their limits.” Step 2 Obtain your credit report and make corrections. If there are errors in dates, payment amounts or other information, file a
