Taking Time to Conquer Bad Credit
(August 31) -- Mortgage loans usually are rejected when
applicants have excessive debt, insufficient income, or a history of tardy
payments or credit write-offs. However, prospective homebuyers who take a year
or two to reverse those problems will find lenders much more receptive to their
future applications, despite those past problems.
Experts say the first course of action when denied a mortgage is to retrieve a
credit report and review it thoroughly. According to Gerald Beach of the
nonprofit Credit Counselors of Northern Virginia, getting credit back into good
standing and saving money for a down payment should be the top priorities for
these consumers. That may mean working with a mortgage lender to find out the
criteria for buying a home and then working toward that goal and/or consulting
with a credit counselor to develop a debt-management plan.
While declaring bankruptcy might seem the easiest answer for some, Beach and
others warn that this is the least favorable solution, as this kind of credit
blemish will remain on the record for seven years.
Source: Washington Times (08/31/01); Murray, Deanna M.