To be eligible for a mortgage while having a bad credit report is not easy. Most lenders consider it a risk since one can default on their loan. There have been some foreclosures in the housing market, and this has been brought about by the struggling economy. However, you can still qualify for a mortgage and still own a home even when your credit history is far from perfect. The following guidelines will help you know what you need to qualify for a bad credit mortgage.Credit score
You need to get a credit score which is a three digit number from your credit card company usually done for free. The credit score is derived from your credit history. There has been a rise in cases of individuals being scammed so try to avoid using online credit score services and giving your personal banking information to anyone. If your credit score is low, you need to keep in mind that it is just one of the factors that will determine whether you qualify for a mortgage. The lenders will also look at your current income whether you pay your bills on time and present debts if any.Organize your finances
You need to understand that after you submit a mortgage application, lenders take into account how you pay your expenses on a monthly basis. If you are self-employed and have a low credit score, applying for a mortgage can be frustrating. You can therefore try to maintain a steady income yearly and pay out your monthly bills on time. This will raise your chances for your mortgage to be approved.Reduce your debts
Credit scores are obtained from your credit payment history and lenders will be curious to look into how you pay your current loans. Overdue credit card payments and student loans do not speak well on your behalf. Focus on repaying your debts on time and you can do this by putting down more than the minimum amount required each month. This way, lenders will see that you are making an effort in repaying your debts, and this will bring your credit score up thus improving your chances to qualify.Debt-to-income ratio
To stand a high chance of qualifying for a mortgage with bad credit, you need to work on your debt-to-income ratio. This means that you have to work on paying off your debts such as student’s loans if you have one so that your debts are lower than your income. One way you can do this is by requesting your credit card company to increase your credit limit. However, by doing this, you need to be disciplined in a way that you check on your expenses to avoid overspending leaving you with more debts to pay off. This you will improve on your debt to credit ratio.Mortgage interest
Lenders tend to charge more interest on mortgages taken on a low credit score. They do this as they need compensation due to the high default risks involved. This, however, can work for you the other way round too. When you improve your credit score, you get a higher chance of being charged lower interest rates on your mortgage.