We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.
It is unlikely you could be approved for mortgage financing with that credit score at this time.
Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.
First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.
Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.
I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.
The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.
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what is your recent history like?? it's very important you stay current with all your payments.
review your credit report; make sure you correct any errors. get each of your credit card balances under 30% of their approved limit. Oh! did I mention, never be late with any of your payments.
it doesn't seem like you're ready for your first home yet.
If your scores are low, this means your not financially ready. You need to be financially educated on how this "buying a home" works and how it will effect you and your money now and down the road. Buying a home is part of a larger picture of your financial independence and the start to you building some wealth. Get with a lender that will help you. I have a link here to some great lenders that work with first time buyers and can advise you on how to fix these credit score issues. http://www.markknowshouston.com/res_list.php?cat=12282&c
Bernstein Realty, Inc.
Improve My Credit
Tranquility Credit Repair
Credit Recovery Group
Caravan Credit Services
Sky Blue Credit Repair
Check them out through their web sites.
Get a timeline on getting your credit scores up to at least 620, or better (680), and get a preapproval from a home mortgage lender.
Once you have your preapproval, get in touch with a REALTOR(r) to find homes that meet your requirements and price range.