Have Bad Credit and Want a Mortgage Loan?


Defined Tag: Bad Credit Home Loan.

There's a train of thought that runs something like this: 'It's okay to have bad credit if it's only a couple of hundred dollars. If it's not a lot it'll be overlooked, right?' Wrong. The simple fact is that debt that's gone unpaid past an acceptable point of time is not just debt, it's bad credit.

There was a time when debt and bad credit wouldn't hurt you. Then came the 1980's, Reaganomics, accountability. Ah, the 70's. Well, open the window, disperse the smoke clouds, and get over it. You want a house, right? Or maybe even refinancing? The rules are basicly the same either way, with just a little leeway for those who already own their own home.

You don't want a history lesson you say? You barely even remember the 70's and could give a rat's tail about all of that? Fair enough. The nuts and bolts of it all, however, is that you want to come out of this debt you've found yourself in. The first step out of the muck is to tell yourself the truth: you're a consumer with poor spending habits, and that has to change: no more unnecessary purchases.

It is just this sort of expenditure that is at the heart of debt. It is a truly sad affair to consider that numerous unpaid (or slowly paid) purchases can limit a great purchase like that of a home. A waterbed, mag wheels, new tiles on the kitchen floor, a canopied bed, all fine possessions, but if you have to put them into someone else's home -that is, a rented property, then they're really not that sweet, are they? Ask yourself: just how important was having the latest flat screen T.V. to replace last year's flat screen?

Priorities. These will get you through bad credit in favor of that mortgage loan. Once your mindset and habits have been modified, then it's time to buckle down and pay your dues. You want a mortgage loan despite bad credit. You need your credit report. This isn't one, but three reports, some similar, some different from each other, depending upon your spending habits of the past and of the information-collecting standards of "the big three" -that is, the three big credit reporting agencies.

These three reporting companies commonly go by the names of Equifax, Experian, and Trans Union, though their actual names are bit more involved. They cover the debt of everyone that buys anything on credit within the borders of the U.S. -anywhere. This includes even Hawaii, Alaska, and little Puerto Rico.

Bad credit? Mortgage loan? The next step is to send for a credit report from each of these companies. Two of them will charge you for the service-about $8.00 each, with the third company giving out a free report. When you receive your reports, go over them with a fine-toothed comb. Ensure that every debt that you're said to have is of the true amount that you owe (if, in fact, you do owe anything). If a mistake has been made, don't waste a single minute: bad credit will eat away at your finances -in interest alone, if not lost sleep.

As for fears of beauracratic jumbling, fear not: The Big Three were sued in 2000 for 2.5 million dollars in penalties by the Federal Trade Commission for being less than helpful in rectifying mistakes on credit reports.

Lastly, while waiting for your credit reports to arrive, talk with a loan officer at a bank -or better, at a credit union (which generally offer more competitive interest rates and, let's face it, better services all-around). S/he will put you on track to that mighty juggernaut of good credit called escrow, a not unworthy adventure in itself. But that is another story for another time. For now, put aside that bad credit, get that mortgage loan!