Avoid extremely high interest mortgage and improve your credit score for good

Is there another option to getting an extremely high interest mortgage for the risky borrower?

The best option is to delay your home purchase for a year or two. During that time make all credit card and loan payments on time, make sure that there are no errors on your credit report, and save money for that down payment. For many potential borrowers with poor credit, the amount of interest on the loan and the amount of required down payment are just beyond their means.

There is nothing wrong with putting the home purchase on hold while you work at cleaning up your credit. In fact, lenders will be positively influenced by such a move. To the lender, that shows that the borrower is making a real effort at dealing with the credit problems before taking on a mortgage.

What can I do to permanently improve my credit score?

Clear up any past due amounts now.
Pay your bills on time.
If you have a problem with paying your bills, try to work out a payment arrangement with your creditors.
If you cannot get a payment arrangement with your current creditors, go to a legitimate, nonprofit credit counseling service. Do not fall for the scam artists who promise perfect credit overnight.
Stop charging today. Keep credit card balances low.
Do not pay one charge account with another charge account's check. All that does is multiply your debt.
Do not close unused accounts. Those zero balances may help your credit score.
Do not open new accounts unless you really need them.
If your credit history is less than three years, do not open several new accounts in a short period of time. Open one account and use it for a while before you open another.
Do not max out credit limits on accounts.
Review your credit report and fix any errors.

What about those companies that advertise that they can fix my credit report for a fee?

The Federal Trade Commission (FTC) has warned consumers about companies that make claims about credit repair. These credit clinics usually do nothing more than consumers can do by themselves without paying anyone a fee. Companies that offer to create a brand-new identity with a new credit file for you continue to get unwary consumers involved in their fraudulent activity that often includes identity theft. There is no easy way to quickly fix a credit report. Other than fixing errors, other blemishes will be resolved only by time.

Warning Signs for Dealing with Credit Repair Companies

Avoid dealing with credit repair companies that cost you money and will not provide you any benefits.
Beware of credit repair companies that offer to remove information such as late payments, bankruptcies, or other judgments from your credit report. They cannot.
Beware of credit repair companies that will not give out a street address or will only provide an off-shore P.O. Box.
Beware of credit repair companies that charge a large fee.
Beware of credit repair companies that ask the consumer to repeatedly dispute an item on his or her credit report that has been already found to be correct. This indirect harassment of the credit bureau will not change the item in question and may cause the consumer other problems.

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