Bad Credit Mortgage Facts

Sometimes it is necessary to improve your credit rating prior to obtaining a loan. Knowing how to fix bad credit will help you gain a loan with a lower interest rate and better repayment options. There are many reasons that people suffer from bad credit. Maybe the credit bureau reporting agency has bad information.

Following some steps to improve your credit rating and get the loan terms that you deserve.

The most effective way to fix your credit report is to attack it from 2 different directions.

1. Contact the reporting agency and inform them of the error
2. Contacting the company or lender that is reporting the error

Let’s first try to fix my credit using the first method. We will be contacting the credit reporting agency. There are a couple items that must be known prior to contacting them.

1. How do credit reporting agencies work?
2. What kind of information do credit reporting companies report?

First thing you must do is know what is on your credit report. If you haven’t seen your report in a long time then get a free government credit report and read it. Knowing what it says will help you determine if the information is false or reported incorrectly.

Next start gathering information that will prove that your information is wrong. Always make copies of the documents. It might be necessary to try and fix your reports on numerous occasions. So always keep originals and send copies to each credit reporting agency.

Send a letter to the agency explaining who you are and what needs to be fixed or corrected. Include the following information with the letter:

• Your full name, date of birth, social security number

• Any previous names or addresses used during the period of the incorrectly reported information.

• The creditors name, account information (include account number and when the account was opened)

• Information that is wrong (Making sure that it is to the point and states exactly what is wrong and what needs to be corrected on the report)

• Notes and references and all enclosed documents.

Send the letter through registered mail. The credit reporting agency must investigate all disputes within 30 days. They will investigate and report back to you their results. The FTC has a nice sample letter for you to use on their site.

It is also a good practice to attempt to fix your report directly with the creditor that reported the account. Just send the same information to the creditor and wait a couple weeks. Give them a call and they will usually assure you that this type of problem will not repeat itself.

There are many reasons that you might have to check your report and have a few issues to fix. These issues include:

• Clerical Errors

• Ex-Spouse’s Credit Problems Linked to you

• An error in your social security number. This is common and will lead to you getting a rating of someone else.

• You were a victim of identity theft and not everything was taken off.

Keep in mind that as you fix credit  it is necessary to be re-building your credit to remain attractive to lenders.

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