Bad credit can affect whether you are approved for a home loan. You can help correct credit errors by writing a letter to the creditor or include written letters with your credit report. Letters explaining a job loss or long term illness may change the mind of the lender viewing your credit report. You should also provide proof for the reason you did not pay your debt. A bad credit report will stay on your record for approximately 7 years and 10 years for bankruptcies.

Lenders have offered loans to buyers with bad credit by charging them a higher interest rate. These are called subprime loans. Subprime loans are difficult to get because of stricter federal laws.