Credit Card Debt Free

Credit Card Debt - Mortgage Can Wait?

Buying a home is the American dream. If you want to achieve that dream you must have good credit. This means you need low credit card debt and make enough money to pay your bills. If your credit is not looking so good, you may need to consider waiting before you apply for a mortgage.

Your credit says a lot about you and how responsible you are. If you are currently behind on bills or have been in the past, it does not reflect well on you. Mortgage companies want to know that you can pay the bills that you have. They do not want to loan you money if you already show a poor history of repayment. It also does not look good if you have a lot of credit card debt. When lenders see this they automatically think that you are living off of borrowed money, and spend more than you should.

Before you apply for a mortgage you will need to clean up your credit report. You should have at least one year of on time payments. It is also ideal to have your credit card debt down to ten percent or less. During this time do not apply for any new credit, this will show lenders that you are not desperately trying to get your hands on more money. If you have any unpaid collections you will need to pay them off. Try to get the collection account deleted by negotiating with the collection company.

Once you have successfully cleaned up your credit report it is time to start your mortgage application. You will be happy that you waited when you see that low interest rate that would not have been available to you previously. Enjoy the fruits of your labor because you deserve it.