How long does bad credit repair for mortgage approval take in Houston?

How long will it take to repair bad credit if you want to obtain a mortgage to purchase a home in Houston TX? We are asked this question quite frequently. Since the majority of our clients are credit-challenged home buyers, they want to know if they would be able to fix their credit in a few days before applying for a mortgage. The answer is no.

You can’t fix bad credit in a few days in most cases (except for when bad credit is due to some error on part of the credit rating agencies). When our clients are turned down by traditional lenders, we help them get owner financing on any home they want in Houston or other cities in Texas with no credit check or income verification.

So how long does credit repair really take?

Well, it depends on what factors are causing bad credit. You need to know the reasons for bad credit when determining how fast you can improve your score.

In a recent article, we discussed how Houston home buyers can check their credit score at no charge. Once you receive your free credit report, it’s quite easy to find out the reasons for bad credit. As already mentioned, how long credit repair takes will depend on these reasons.

Late payments

Let’s say you have missed a couple of debit card payments when you were going through a short-term financial hardship. This type of delinquency doesn’t affect your credit score for a long time. As you keep up with your payments and maintain a low balance on your cards, your credit will start improving in a few months.

Collections and charge offs

In this scenario, you stop making payments on a credit card loan. Your lender will contact you by phone and send mails reminding you of the late payments and subsequent penalties.

If you continue to default and don’t make payment, your debt is deemed unlikely to be collected. It’s called a charge-off.

Charge offs and collections can stay on your credit report for up to seven years. Make sure that you pay your outstanding credit card and other debts to avoid this type of delinquency at all costs.

Bankruptcy, foreclosure and short sales

This is the most severe form of delinquency. If your lender foreclosed upon a property due to your failure to pay off the mortgage, it may stay on your credit report for up to 10 years. The same thing will happen if you filed for bankruptcy to avoid foreclosure. A short sale also impacts your credit but a bit less severely.

In these cases, it will be very difficult to improve your bad credit for buying a home in Houston TX or anywhere else for that matter. You may end up waiting for years for your credit score to improve if you want to finance your home purchase with a traditional mortgage. (See also: buying a home after bankruptcy, foreclosure and short sale)

In conclusion

It is entirely possible to repair bad credit, but it can’t be done in a few days or months in most cases.

Our credit-challenged clients can get owner financing without credit check or income verification. They improve their credit in the owner financing arrangement because they make their monthly payments through a note servicing agency. The agency reports their payments to credit bureaus. They can then refinance their loan with a traditional lender.

Set an appointment today to learn how you can buy a home in Texas with no credit check or income verification.