Checking for Credit Mistakes

Before applying for a loan with a mortgage lender, go over your credit reports carefully to search for mistakes or information that a lender will see as a red flag. Keep in mind most people have some type of error on their credit file which may be a typo, incorrect name, outdated account information, incorrect account history, accounts that are not yours, or collections or liens that do not belong to you.

Any mistakes you find can be disputed with the credit bureau. Provide any documentation and be prepared to wait up to a month for a response and an update on your report. Correct negative information, on the other hand, can stay on your credit report for up to seven years, except bankruptcy which can remain for 10 years. The older the negative information, the less it will hurt your credit score. You may have luck contacting your creditors and asking them to remove negative information.

Pay on Time and Avoid New Debts

In the months leading up to your mortgage application, make sure you pay all of your bills on time to avoid recent late payments on your report. You should also avoid opening new credit accounts, or closing old accounts, both of which can harm your credit score and make your lender think you are having financial problems.

Rapid Rescoring

Some mortgage brokers and lenders offer something called Rapid Rescoring, a technique that helps you quickly improve your credit score in a matter of days. Rapid rescoring involves getting information added or updated on your report in days, not weeks. It can help boost your score by a few points to 50 points or more, depending on what information is updated or corrected, helping you get approved or get into a better credit tier for a lower rate.