 TITLE: How to Get a Home Loan With Bad Credit CONTENT: How to Improve Your Credit Scores Before Buying a Home\n------------------------------------------------------\nEven if you really want to buy a home right away, it might make more sense to work on your credit first. Particularly if you're already struggling with bills, taking on a new, large financial commitment could stretch you beyond your means.\nThere are many ways to improve your credit scores. Here are a few tips :\n*   **Continue making on-time payments.** Making credit card and loan payments on time is one of the best ways to improve your scores. Even if you can only afford minimum payments, that's better than missing a payment altogether.\n*   **Pay down revolving debt.** Your credit utilization rate is the percentage of your available revolving credit that you're using, and it's an important factor in determining your credit scores. Paying down your revolving debt, such as credit cards and lines of credit, can help lower your utilization rate and increase your scores.\n*   **Keep your credit cards open.** You could cut up a credit card or lock it away somewhere if you don't want to be tempted to use it. However, closing a credit card account will lower how much available credit you have and could increase your utilization rate.\n*   **Build your credit file.** If you have fewer than five open accounts or no recent activity on on your credit report, you may have a \"thin file,\" which can make getting approved for new credit accounts difficult. You may want to use your credit card accounts to add recent activity to your credit reports. Or, if you don't have any accounts, trying opening a secured credit card, use it to make a small purchase each month, and pay your bill in full by the due date to build a positive credit history.\n*   **Time your applications.** Applying for new loans or credit cards can also lead to a hard inquiry, which can hurt your scores. Hard inquiries stay on your credit report for two years, but generally, their impact on your scores only lasts a year or less. It may be best not to apply for any new accounts once you're several months away from applying for home loans.\n*   **Think twice before filing a dispute right before applying for a home loan.** An error on your credit report, such as a late payment that you're certain you paid on time, could be hurting your scores. Disputing the error and having it removed or corrected could improve your scores. However, the process could take 30 to 45 days, and you might have trouble getting approved for a mortgage while there's a pending dispute on your credit report. If possible, check your report for problems several months before you plan to apply for a home loan.\nIf you have bad credit but aren't at the very bottom of the score range, you may still be able to qualify for a home loan, but you likely won't get a great rate. Consider your mortgage options and look for loan assistance programs to help you get as good of a deal as possible. However, if you're able to put off the purchase while you work to improve your credit scores, that could save you a significant amount of money over time. END