If you have been looking for house loans for bad credit in Chicago, IL, you probably know all the names of mortgages by now. As a result, you are highly likely to know their purposes as well. But do you know that bad credit does not destroy your dream of owning a house? Let’s have a look below!
What Lenders Mean by ‘Bad Credit’
There is no credit range that screams you will be disqualified from landing a home loan. Low FICO scores put you at risk, and lenders have a hard time approving the program. If you are trying to get hold of a conforming loan, you need to have at least a credit score of 620. Government-backed mortgage programs are more flexible allowing low credit scores.
The range of credit score is typically between 300 and 850; however, some credit scoring model follows the 250-900 system. FICO is the most commonly used scoring model in the United States. And credit scores above 710 are considered as good.
You need to keep in mind that you can never find an exact cutoff for a good score. Many lenders advertise that the best interest rates are only accessed with high credit scores. Remember, the credit scores depend on credit reporting bureaus.
Checking the Credit Report
When you are trying to find house loans for bad credit in Chicago, IL, you need to take a look at the information on the credit report. You can easily do it at home – all you have to do is get hold of 3 major credit bureaus like Equifax, Experian, and Transunion. Every individual gets a free credit report every year. Due to the pandemic, you can get a free weekly credit report till April 2022.
One vital thing you must learn is how to read a credit report. As you need to check whether the information on the credit report is legit, this is an essential step to follow. Later you can find out the errors and send an application to fix them. This is the best way to improve credit scores.
Then you will find out your credit score. Many online sites provide the service, and you have to purchase the information from the credit reporting agencies. Some of the bank loan statements carry the information for which you have to pay nothing.
