How Do I Clear My Bad Credit History?

Potential homeowners who are researching the various aspects of the home-buying process may want to learn more about how they can successfully clear their bad credit history. When applying for a home loan, mortgage lenders perform in-depth checks on the applicant’s credit and financial history. Applicants with low credit scores and poor financial histories are likely to be considered high-risk borrowers and may have difficulties gaining approval for their desired home loan product. 

Luckily, there are multiple ways for individuals to begin improving their credit scores and clearing their bad credit history. 

How to Clear Bad Credit History

Having bad credit history can severely impact an individual’s chances of becoming approved for a home loan. Additionally, bad credit history can affect potential borrowers borrowing power. 

Individuals can begin clearing their bad credit history by checking their credit history to learn if there are any disputable, contestable, or unfair credit listings. Potential borrowers have the potential to remove a wide variety of information from their credit reports, including the following examples:

• Crossed and linked files
• Judgements
• Clearouts
• Court listings
• Overdue accounts
• Multiple identities

Potential borrowers can benefit from working with a professional credit repairer, however, they can also perform these tasks on their own. 

How to Improve a Credit Score

It is highly recommended that potential homeowners work on improving low credit scores before deciding to apply for a home loan. There are various ways for individuals to begin improving their credit scores, including the following examples:

• Clearing bad credit history
• Paying all bills on time and in full
• Pay off any existing debts, including credit card balances
• Ensure credit card balances are kept low
• Limit credit applications