Let’s say you are looking for a new home and would like to apply for a home loan to get the dream home you have always wanted. You are devastated when you learn that your loan has been turned down or the interest on the loan has skyrocketed. What can you do?
The reason for the rejection of your loan or the high-interest rates is due to your creditworthiness and the way the lender interprets the information when checking whether you would be able to repay the loan.
If you act quickly, you can increase your score before applying for the loan. Don’t wait until the last minute when you apply for a loan to try to increase your score. It may take quite a while before you can repay your loan.
It is better to work on increasing your score first and then apply for a loan. The better your scores are, the more chance you have of getting a loan at a better interest rate. Get copies of all three credit reports.
Look through them to see if they contain false information that could affect your chances of getting a loan. Deny everything that should not be on these reports. If your report contains negative points that are correct, try to resolve them by paying off the debt – even if it’s only a little at a time.
Pay as much as you can regularly to show that you are making a great effort to repay your debts. If creditors can see that you are making an effort, they will be more willing to report this to the offices, which would have a positive effect on your credit rating.
Another option that some people try is to deny a negative point that they know is right. If the bureaus cannot verify the information within a certain time frame, they will have to delete this point from their reports.
Although this is legal, it is not really recommended. There is no guarantee that even if the credit agency deletes this item, it will not reappear later when they can finally verify the information.
Make sure that you keep all your accounts and invoices up to date and current. Even late payments will appear on these reports and affect your credit rating. The more positive items are reported, the better it will look to potential lenders.
Unfortunately, it will be difficult to remove some items from your reports, but don’t let that stop you from removing the negative items. Don’t be afraid to ask the credit reporting companies to investigate again, as this sometimes helps.
If not, you must drop the case and focus on what is really important – trying to get more positive elements in your credit reports. When you’ve done all you can with the reports, you should start looking for lenders from whom you can apply for a home loan.