Already, people with a poor credit history are on a major disadvantage, because banks and money lenders view them as a higher risk ,they charge higher rates of interest to safeguard against default whether wilful or otherwise. If your credit rating is exceptionally poor, you may want to consider trying to repair it and whilst it may take some time, it will pay off substantial dividends in the end. Say you get a home loan for $100,000, and because of your poor rating you are charged an extra 1.5%. That may sound like a petty amount, but when you consider that that 1.5% is equal to $1500, the tactical benefits of improving your credit score can be plainly seen.
The first step is to gain a copy of your credit report, simply contact a credit reference company, pay a nominal fee, and they will be able to provide you with your entire credit history, once you get a copy, make sure to go through it thoroughly and tally up and account for each and every transaction. You will probably find that there is outdated information, and chances are there maybe old debts which have not been properly cleared, and thus come up as delinquent. This will be a laborious, time consuming and tedious process, but your diligence will be amply rewarded when it is time to get a home loan.
Different credit reference companies will provide you with different details and different items in the inventory, so you may want to apply to several companies and obtain copies from each so that you can make a better assessment of them all. When you finally do get a home loan, make sure you calculate the actual amount you can comfortably afford to pay as a down payment. You may want to reserve some funds as a buffer, in case of an emergency.