Getting a mortgage today is a little more difficult than before the housing crisis. For example, most down payment assistance programs today require a minimum credit score of 620-640. The good news is that credit reports may be improved and credit scores raised. You can fix your credit report on your own, or you can have a legal credit repair attorney do it for you.
One of the things you, as a first time home buyer, will want to do is get a copy of your credit report and find out why your scores are low. Review the report for negative information and errors. Inaccurate information or errors can cause your credit scores to drop. An example might be a late payment that was actually on time, or the credit limit on one of your credit cards may be reported wrong, making it look as if your balance is over the limit.
Negative information on your credit report is often called derogatory information. It includes late payments, charged off accounts, accounts in collection, judgments and bankruptcies. These will cause your credit score to go down quickly.
After you find these derogatory accounts, make a list of the ones you want removed. Remember, you cannot change accurate information, only items that have been reported in error. Arrange your list so that the oldest account is listed first and the newest account is last.
Then, write a credit dispute letter for the first two accounts on your list to each credit bureau that the negative information shows up on. There are three credit bureaus, and they may all report differently, so make sure you send an accurate dispute letter to the bureau or bureaus that have a negative report on you.
The dispute letter tells the bureaus that you do not agree with the negative information they are reporting. Each letter should contain your account number, your name, address and Social Security number. Also, state the reason you do not agree with the negative item on your report.
After the bureaus have received your letter, according to Federal law, they must investigate the information by going to the original creditor or lender. If the creditor does not or cannot provide proof that the information is correct, the credit bureaus must remove the item. Once the negative item is removed, your credit scores should increase. Then you can dispute the next two items on your list, and so on.
Many online resources deal with the subject of credit repair. In addition, credit repair companies and attorneys can help you with your credit repair for a fee. Make sure you investigate each company or attorney thoroughly before engaging them. Credit repair, if done correctly, is legal, and can help you raise your credit scores fast.