A person is said to be in a bad credit category where his credit score in not upto the mark or in other words where the FICO score is less than 500 points you are considered to be in a Bad Credit category. Getting a mortgage loan on a bad credit category at a reasonable cost is close impossibility. There are agencies who provide mortgage loans on bad credit but that comes at a very high cost.
Fair ISAAC & Company (FICO):
Fair ISAAC & Company is called FICO. FICO is one of those well known Credit Reporting Agencies. Credit report is a repayment analysis of all your previous loans. While credit score is the points you have earned for repayment of all your installments in time and in full. Lenders invariably process a loan application based on the FICO score. Hence, the higher the FICO score the greater the chances of loans getting sanctioned and lower the score remote are the chances.
Improve Credit Score for a Bad Credit Mortgage Loan:
It is well understood that ?credit score? is the critical factor for loan sanctioning; hence it would be advisable to personally work on rebuilding it before applying for a mortgage loan. A disciplined approach towards managing your previous loans and clearing all your dues in time before making a fresh one, your credit score improves, thereby bettering the chances of raising a new loan at a lower cost.
The lender has readymade information on your credibility by way of a FICO score; hence if the credit history is not good he can straightaway have the details.
You can always raise a loan in spite of a bad credit situation. There are lenders who provide loan on a bad credit charging exorbitant fees and high rates of interest. This is mainly because you are a risk factor and the fact that they offer loans when others disqualify your application adds up.
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