Steps in Repairing Your Credit to get a VA Loan
Today, getting a loan is a more difficult process than it was a few years ago. Banks are more hesitant to lend money and they have increased the requirements in many cases, meaning that you need a much better credit score than you used to in order to take out a loan. However, thanks to VA loans those who are current or former military service members will have a much easier set of requirements. The VA programs are designed to help make it somewhat easier to qualify since the VA will back your loan. However, you still have to have qualifying credit in order to get a loan, normally at least a score of 620. If not, you need to take steps to improve your credit.
There’s no magic bullet for improving your credit score overnight. It’s going to take hard work, patience, and effort. To start with, get a copy of your credit history. You’re allowed to get a free copy once per year, simply by visiting annualcreditreport.com. Take the time to review it and look at the different negative reports. You’ll need to know what is dragging down your credit score if you want to pull it back up.
Contact those that you have negative reports with and try to set up some kind of payment arrangement. Sometimes you can settle for a smaller portion of your debt, so you may be able to improve your situation for less than you think. In fact, since one in four reports have inaccurate information, there’s a good chance you can simply call an agency and have the offending information removed entirely. Make sure that once you pay off your debts that the creditors will report this to the credit agencies, but if you’re serious about it feel free to actually send a copy of a debt settlement letter to the credit agencies on your own. And if you’re normally on time with your payments but have missed a single payment, you can often call the reporting business and ask them to remove it.
Once you’ve caught up on outstanding debts, maintain your current level of debt. Don’t fall behind on payments and try to keep your credit cards well below the maximum credit limit. While you’re at it, think about how you got into the situation in the first place. While some hardships are unavoidable, it is important to identify any patterns in your history. If you consistently are late on credit cards or other payments then it is worth while to think about closing some of your revolving credit accounts and changing your spending habits. And if you really need help, consider using a secured credit card that is designed to build credit. Like anything in life you get what you put in and the same thing goes for your credit score. Changing spending habits and following a plan to remove delinquencies are good practices to start with.
VA Loan Captain can assist you in getting a better understanding of your credit score and receive free credit counseling. For more information and to enroll visit us here.