Do you have bad credit?  Do you want to buy a home but are worried your credit will shatter that dream?  If you said yes to either of these questions, you need to know that there are bad credit home mortgages available.  Even in today's rough economic situation there are many lenders who are still lending money to people with bad credit to help them with the american dream of buying a home.  To learn about specific loan programs visit bad credit mortgages.

Having been in the home mortgage loan business for 5 years, many people always ask me, "What exactly do lenders consider as bad credit?" By understanding what the lenders are looking for it will help you to formulate a credit recovery plan, or surprise you that you may be able to qualify right now for a home loan!

The Things Lenders Hate To See On Credit Reports

1. If you have had a mortgage within the last 4 years or have one right now, lenders DO NOT want to see mortgage lates. If you owned a home over 4 years ago lenders don't care, but if you have had mortgage lates within the last 12 months on a current mortgage you will need to wait 12 months from the last late before you can refinance or buy another home.
2. Foreclosures are ok to a lender if they are more than 4 years old, but if they are more recent you will have to wait until a foreclosure is 4 years old before a lender will look at approving you for another loan.
3. Late Payments can sometimes hamper a loan but can be worked with if you have a decent credit score or if they are more than a year old. This can also be said of collections.
4. TAX LIENS and Judgements are also very BAD as they take the first lien position on a mortgage loan. Lenders will automatically turn you down if you have these because it means if you default on the home mortgage and the house is sold, the tax lien and judgements would be paid off first and then the lender would get whatever is left. This is too big of a risk as the lien holder wants to be the first lien holder on the home.
5. Back owed child support can also kill a loan deal. Make sure you are all caught up or wait till you are all caught up with your child support before looking for a home. The problem is that if you have back owed child support it is the same as a judgement.
6. Bankruptcy is only an issue if you have filed within the last 4 years. If your BK is more than 4 years old you can still get prime lending rates just like everyone else.

Did you know you can fix your bad credit all by yourself for free? We are not joking and have been using these free do it yourself credit techniques for over 5 years with thousands of clients. What are the techniques you may ask?

You can find a full list and explanation of these steps at Repair The Score, but we will go over the most important ones here.

1. The first step to fixing your own credit is to obtain your own credit report. You need a tri-merge report which shows you your 3 credit scores. You can obtain a credit report from a bank or even online from services such as freecreditreport.com
2. The next step is to circle on your credit report any recent lates, collections, judgements, and tax liens. Circling these will help you target the problem areas and know what actually needs to be fixed.
3. The third step is to write some credit repair letters. These letters go directly to the credit bureaus and dispute certain items on your credit report. After sending these letters you will get a response back within 15 -30 days letting you know if anything got deleted or stayed on the credit report. This technique alone can raise your score 30-90 points!

These are the most important steps to credit repair that we feel will take you the most time.