People with credit issues can still realize the dream of homeownership. If you can, spend at least six months working on your credit score by paying down debt and trying to get collections accounts removed before you apply for home finance in Nashville Tennessee with bad credit. Read more about strategies for improving your credit to receive more favorable mortgage terms.

Prior to submitting a loan application, it is best to acquire copies of your credit reports and check for accuracy. This means reviewing the accounts, balances, payment history, names, dates and more against your records. If you spot mistakes, dispute them with the credit bureau, provide any documentation you have, and wait at least a month to make sure the errors are removed or corrected.

To help make up for your low credit score, demonstrate steady income that is sufficient to pay the loan. Eliminate as much debt as possible, as a high debt-to-income ratio will make it even harder to get a loan. Having very little or no other outstanding debt will make your loan application seem stronger.

The next step to strengthening your application is putting down as much as you comfortably can on the down payment. This demonstrates you are making an investment in the home and have “skin in the game,” improving the chances that you will stay current on the loan. You may be able to find programs that offer down payment assistance to help.

You will likely be asked for written explanations regarding negative marks on your credit, such as collections or late payments. Be prepared to explain any financial difficulties you had, particularly if the problems were only temporary, such as divorce or illness.

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