How to Repair a Credit Mortgage

If you've struggled with your mortgage in the past and, as a result, have some dings on the account, it's in your best interest to begin repairing it. You can damage a mortgage account by making late payments (causing credit report delinquencies), not paying enough in interest charges, and not adhering to the amortization schedule. Fortunately, it is possible to get your mortgage on track so as not to damage the account, and indeed your credit, further.

Step 1

Obtain a copy of your credit report. See the link in Resources for information on obtaining a free copy. You'll need this to review the damage done to the account.

Step 2

Look at your payment history on your mortgage. Even one 30-day late payment can seriously damage both your relationship with your lender and your credit report. Look for a pattern of late payments and determine how much principal you've paid down on the account.

Step 3

Call your lender to find out if you owe any deferred interest on the account. This type of interest is usually found only if you have a simple interest calculation on your mortgage. This type of interest is calculated on a day-to-day basis. Assuming an adequate amount of self-discipline, you can actually pay less interest over the course of the loan with this option. However, if you're late, you can end up with extra interest--also called deferred interest.

Step 4

Set up your mortgage payment so that it's taken from your bank account automatically. Some lenders call these payments SpeedPay or EZpay, and they'll ensure that your mortgage payment is on time each month.

Step 5

Review your expenses for one month. Look for areas to reduce spending. Often you can save hundreds by eliminating small pleasures such as daily coffees, movies on the weekend, and eating out. These savings can be applied to delinquent mortgage payments.