Bad Credit? No Problem
Your credit score is very important when buying a house because it is the main factor in determining how much mortgage lenders are willing to offer you. A good credit score makes things easy because it proves that you are trustworthy. A bad credit history can be a negative in the process but don’t worry we will show you how you can still buy a house despite a bad score.
If you don’t have a good credit history or any credit history for that matter, there are some other factors that can help you qualify for a mortgage. By definition, your credit history is a track record of your past debt-to-credit utilization, but there are a few other things that don’t appear on your credit history such as your car loan payments, monthly rent payments, utility bills and tax payments and so on. Many lenders are willing to consider looking at these extra records to help determine your trustworthiness. Make sure to have a good record of your timely payments related to rent, car loans, utilities, bills and any other such payments.
Additionally, there are programs that are designed to help improve the credit history for those with a medium to bad credit history. For example, many government-funded programs are able to work with very low credit scores in helping buyers qualify for house financing.
Many credit counselors advise you to work on improving your credit score before going out to buy a house. They advise buyers to spend the months before buying a house building up credit by paying up credit card debt as much as possible. Paying all monthly bills on time and keeping a good track record of all payments will help. Finding and working with a financial planner could be a very helpful step, planners can advise on how to create the best credit-worthiness image by use of many tactics.
A low credit score should not stop you from owning a house, start working on the aforementioned steps early and you will be on your way into your house.