

Your credit score is probably the most important factor in whether you get a mortgage loan at a decent interest rate. If one or both of you has credit problems, getting an affordable mortgage will be a challenge. Fortunately, there are options for coping with questionable credit, so you just may get your dream home after all.

No Joint Credit Scores

There's no such thing as a joint credit score or credit report. While your joint accounts, such as a credit card or loan that both of you signed for, affect both sets of credit reports, your scores and credit histories remain separate. When you apply for a mortgage, your lender requests credit reports, and scores, for each of you.

Different Lenders, Different Standards

Every lender has its own lending standards, so there is no universal credit score cut-off for getting a mortgage. For example, some lenders make their mortgage decisions by looking at the lowest of your two credit scores. Others will order a merged credit report, which combines information from all three credit reports for each of you into one giant report. Incidentally, the merged report does not combine your credit histories; it's simply a tool used by your lender to make credit decisions.

Solo Mortgage

If one of you has a very low credit score and it's hurting your chances of getting a mortgage or a decent interest rate, the person with the highest score could try getting a mortgage on her own. For example, if you have a higher credit score than your spouse, you can apply for a mortgage based solely on your credit, your earnings and your assets.

Get Help

If your credit scores are a concern, get help. Housing counselors approved by the U.S. Department of Housing and Urban Development (HUD) can help you understand your mortgage options. Many housing counselors offer credit counseling as well, and can help you get your finances in order. Avoid working with subprime lenders who may offer you a mortgage with very high interest rates and fees. A good housing counselor can tell you about state and federal programs that can help you get a home, even if your credit scores aren't so hot.

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