What Is a Failed Credit Score and How Does It Affect Your Ability to Buy a House?

May 16, 2012 by  Filed under: Loans 

The typical process that involves purchasing a home consists of having your credit rating checked by the bank or lender. This is done so they can properly assess your capability of paying off the loan in case you are approved.

They will check your files and see if you have a favorable score before they can award you the loan. The only problem is a lot of people fail this process because of bad credit ratings. A failed credit score always has a huge impact on one’s ability to get a mortgage loan.

Someone with a bad credit reputation is most likely not to be given a loan simply because it shows that the individual is a high-risk borrower. That means, there is a huge chance that this person is going to miss out on monthly mortgage payments and cause problems in the future.

Since most lenders have very strict policies when it comes to lending money, someone who has a bad credit history is most likely to be denied of a loan.

It is not hard to see why. If you look at it using the lender’s perspective, you will not consider someone who you think is going to be a delinquent borrower. You’d want to be sure that the person you award a loan to is going to be able to pay off the loan without any difficulties.

That means someone with a low credit rating is less likely to become a homeowner in the near future.

However, not everyone who has failed credit rate have to lose hope. Today, there are lenders who are willing to help out borrowers with poor credit ratings. They can assist these people in qualifying for no credit score home loans.

This type of loans is something that you can take advantage of by seeking help from experts. There are lots of mortgage brokers who are skilled and experienced when it comes to helping individuals with poor borrowing scores get qualified for a home.

But this is not something that you can do even when you have other problems. Take note that you still need to meet certain requirements before you can get a mortgage. You still need to be credit worthy.

But if banks already denied you due to a failed credit score, then how is this different?

This can go through your mind. Logically, if banks already thought of you as unfit for a loan, then how are you going to get approved?

Typically, banks and most lenders use a computer-generated software to check your eligibility. If the system detects some discrepancies, then there is a big chance that you get disqualified.

What lenders, who entertain no credit score home loans, do is they look at your application without the help of a computer. They are going to review your application using a different set of eyes.

Through this, they may find certain areas that prove you could be able to afford the mortgage loan despite your bad credit history.

There are several factors that they are going to consider. Among them are the following:

• Length of employment
• How many mortgage enquiries you have made
• Amount of the loan versus the lender’s maximum loan size
• Use for the loan
• Length of residency
• Type of employment
• If the area of the house to be bought pass the bank’s standards
• How much your savings account has
• How many assets you have

These things can help lenders look beyond your failed credit score. The important thing here they are able to establish you are someone they can trust to pay off the loan.

Getting a loan with low credit score is not a pleasant experience. Luckily, I discovered how to beat the credit scoring system. Learn more about no credit score home loans.

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