What is bad credit?

What exactly is bad credit?

There are numerous types of credit report problems that would cause a lender to reject your application for a loan.

Such problems include: missing a credit card payment, defaulting on a prior loan, and filing for bankruptcy in the past seven years or not paying your taxes. Other black marks on a credit report include a judgment filed against you (perhaps for non-payment of spousal or child support) or any collection activity.

If you feel that your credit report is wrong, experts say it's best to take it up with the organization or company claiming you owe them money. If you've been late paying your bills, regroup by paying in full and on time for six months to a year to prove to the lender that the late payments were caused by circumstances that have been corrected.

If you have problems with your credit report that are legitimate we can advise you on what can or cannot be done to clear up the problems. In today’s market if your credit is not in almost perfect or better condition you are going to find it just about impossible to obtain any type of financing unless you have very substantial down payment.

If you are getting a government backed loan like an FHA or VA then all lenders are going to follow pretty much the same set of credit guidelines as established by FHA and VA. If you’re getting a conventional loan then there are two broad classifications:

1 Conventional lenders that lend and service their there own portfolios
2. Conventional lenders that lend and sell their portfolios

Conventional lenders are likely to have there own guidelines although #2 may be tied closely to Fannie-Mae guidelines creating somewhat of a standard through out this section of lenders.

You can order a copy of your own credit report by calling the three major credit reporting agencies: Experian at (800) 311-4769, Equifax at (800) 685-1111 and Trans Union at (312) 408-1077.