Nov
9
Having bad credit will decrease a homeowner’s chance of getting home equity loan. Bad credit always leads to a poor credit score so a person will encounter difficulties when he wants to avail of a loan.
But what exactly is the credit score? Well, this is a score created by the Fair Isaac Corporation to determine the interest rate that should be charged to a borrower. The scores range from 300 to 850. The lower the credit score, the higher the interest rates that a borrower needs to pay. Having a score of 700 or more will assure the borrower that he can take advantage of low interest rates. The credit score also serves as a basis of whether the lender should accept loan applications. In addition, the credit limit of the homeowner will be based on his credit score.
Three agencies keep a record of the homeowner’s credit score; these agencies include Experian, Equifax, and TransUnion. If a homeowner wants to improve his credit score, he will have to contact each of these agencies. But it is not easy to erase a record of bad credit, the homeowner would need to contest the claims of the money owed and prove that these loans are non-existent. If the homeowner’s claim is proven to be true then he can increase his credit score. Contesting the claims of money owed is necessary for homeowners will a score of 640 and below because those scores are signs of bad credit.
Contesting the credit score is usually not without basis. Surveys indicate that around 80% of all credit scores in the United States have mistakes. A homeowner may have a good reason to contest his credit score to be able to take advantage of lower interest rates. If a couple is joint homeowner then their credit score will be based on the person with the higher income. These homeowners would need to contact the three agencies for these corrections.
Technorati Tags: Credit Report, Bad Credit Loans, Credit Bureaus, Home Equity Line Of Credit
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