According to Broker Outpost, a person can get a mortgage loan with a 520 credit score. Mortgage brokers work face-to-face with the poor credit holder and the lender to sort through credit issues so the credit holder can receive a mortgage loan.
Many mortgage brokers have programs that ignore collections, judgments and medical bills that are damaging to credit. Doing this allows these lenders to offer subprime lending, or bad credit lending. Mortgage brokers can also provide this service if the credit holder has previously been declined by a bank. A group of licensed mortgage professionals on Broker Outpost explains that a credit holder with a 520 FICO score can get 100 percent financing with stipulations from the lending program. A poor credit holder generally has a higher interest rate than a person with a good credit score but has the ability to refinance after he improves his credit.
Those with bad credit can improve their credit score by paying debts and collection fees. They can also contact a credit repair service for additional help. To have a good credit score, make all payments on time. Payment history makes up 35 percent of a credit score. Amounts owed compared to high balances makes up 30 percent of a credit score, according to Broker Outpost. The length of the credit history makes up 10 percent of a credit score and so does the type of credit. Mortgage brokers make suggestions to a credit holder to keep all of the credit score criteria in good standing.