It is not the easiest thing in the world to get approved for a mortgage when you have bad credit. You feel nothing is certain when you think about your credit history. You fear submitting your credit report as part of the loan approval process.

The three credit reporting companies that operate in the United States are Equifax, Experian and TransUnion. Each of them gather information about all of us and store it away. All credit houses are required by federal law to report this information to these companies. When you apply for a mortgage with bad credit, your approval is affected by a report from one or more of these companies.

But how important are these reports in the process of loan approval? Unless you go through an online lender you can expect to wait up to ninety days while the lender goes through your application and your credit report.

Lenders and Credit Reports

You should have gotten a copy of your credit before applying for a mortgage. Make sure you get one from each of the credit bureaus since they will generally be different based on their methods of gathering and storing information. The lenders will look at these reports in greater detail than you probably will. They are assessing the risk that you will not pay back the mortgage or will miss or be late with payments. Bad credit history does indicate that sometime in your past you have not made timely payments on credit debt.

There are five key areas that a lender will look at. Their individual loan approval process will determine how much they emphasize each key area. They will convert your credit report into a series of points that can be accumulated to determine a score that is known only to them. This score should not be confused with the credit score that the credit bureaus supply you with.

These areas are: how much you owe, how well have you paid it off in the past, how long have you had credit history, how often has someone requested your credit report, and how often have you applied for new loans or mortgages. As a general rule, we can assume that they are roughly weighted 35% for payment history, 30% for amount you currently owe, 15% for the length of your credit history and 10% for how often your credit report has been requested and how often you have applied for new guaranteed accepted payday loans.

Can You Strengthen Your Application?

Your credit report is a valuable resource when it comes to building a strong mortgage application. If knowing how much you currently owe is worth 30% of the weighting points, you know that improving it will help your application immensely. Lowering your debt level by just $500 in one month can add 50 points to your credit bureau credit score.

Improving your payment history takes longer to improve but it is certainly possible. If you take out a debt consolidation installment loans for and make the required monthly payments, you will not only improve your payment history but you will also lower your overall debt.

The credit report is not the sole criteria for mortgage approval. You do have to show that you can pay the mortgage back. You have to be able to demonstrate affordability through your job history and debt-to-income ratio.

Credit Restoration

Needless to say, you must make sure your credit report is accurate. This is not a given considering all the electronic exchange of information that goes on today. Do not ever simply accept your credit report and your credit score as is.

Credit restoration is the process whereby you clean up the inaccuracies in your credit report. You should not be surprised to find debt clearances and repayments are not reported as timely as missed payments.

Mark Venite is the author of this article and a successful financial advisor with 20 years of experience. He helps people to get approved for Bad Credit Personal Loan and Student easy approval online installment loans with Bad Credit. For more information about his services please visit him at AccessMyLoan.com