Lenders look at a variety of factors when evaluating a mortgage loan application. If you have weaknesses in your credit history, you may qualify for a U.S. Federal Housing Administration (FHA) loan. You may also qualify for a subprime mortgage, but note that subprime mortgages may have much higher interest rates than most other mortgages. Subprime loans may have other features that influence your rate, such as the possibility that your rate will rise steeply during its lifetime.

If you have a bad credit history or a low credit score, you might consider delaying a home purchase and taking some time to rebuild your credit history and credit score. A housing counselor or programs offered by state and local governments and non-profit organizations can help identify ways for you to improve your credit history. Call the CFPB at 1-855-411-CFPB (2372) to be connected to a U.S. Department of Housing and Urban Development (HUD)-approved housing counselor today.

TIP: Be proactive in dealing with credit. If you are having trouble paying creditors on time, the sooner you talk to your creditors the more likely it is you can work something out with them, such as a temporary payment plan.

If you need help, look locally for a credit counselor but check to make sure they are trustworthy. If you are having trouble with your mortgage, call the CFPB Consumer Hotline at 1-855-411-CFPB (2372) and ask to be connected to the HOPE^TM Hotline. If you start to get debt collection mail or calls from someone you’ve never heard of, it could be that one of your debts was sold to a debt collector, or it could be a case of identity theft. Ignoring the problem usually makes it worse. Ask the creditor in writing for verification of the alleged debt to be mailed to you so you can determine whether it is a debt you owe.