Fix Bad Credit for a VA Loan in the New Year

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Borrowers with damaged credit can use these tips to improve their scores for a VA loan in 2013.

Many Americans have New Year’s Resolutions to leave bad credit habits behind them. VA eligible borrowers who’ve been turned down for a VA loan due to a low credit score can follow the Federal Reserve’s 5 simple recommendations to improve credit:

  1. Make a list of your credit issues and check it twice
  2. Pay all your bills on time
  3. Know what affects your credit score
  4. Take legal action if something is wrong on your report
  5. Avoid scams

Get your credit report and check it for accuracy

According to the Federal Reserve, the only authorized online source for a free credit report is Here you can obtain a free report once per year from the “big 3” credit reporting companies. The reports will list problems with specific incidents that may have hurt your score. With your list in hand, you can check it for errors. Sometimes a bad credit score is a result of a mistake on your report. If there are mistakes, you can take measures to fix them.

Don’t be late paying bills

Lenders want borrowers to pay on time, because it can be a tell-tale sign of a good credit risk. Your credit report will show late payments. If you have trouble remembering to make payments, go paperless and get automated. Automated-bill-pay programs are designed to take funds directly out of your account each month to pay your bill on or before the due date. As long as you have sufficient funds in your account, automation can help prevent late payments from occurring.

Get familiar with how credit scores are factored

Do you have consistently late payments? Is your credit maxed out? Is your credit history too short? Have you applied for credit recently? Do you have too many credit cards? Answering yes to any of these can have a negative effect on your credit score.

Correct errors correctly

If you have errors on your credit report, you can take legal steps to fix them. This doesn’t mean you have to hire a lawyer. But, you do have to call the creditors who made the error and have them fix and report it. Most lenders want more than an explanation from the borrower. They want to see the error fixed on your report and/or an official letter from your creditor admitting the error.

Don’t get scammed

Dealing with creditors yourself is often the best way to resolve issues. The wrong credit repair services could cost you more money and even make your credit worse.

Bad credit this year doesn’t have to mean no VA loan in the New Year. For help with a VA loan, call a VA-approved lender.

Veterans First is a trade name of Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank. I NMLS# 449042 I Equal Housing Lender

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