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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Brian Young 214-797-3479
Five Stars Mortgage
National Home Loan Resource
7 days week - 9am-8pm
You might be able to purchase with seller financing if you have less-than-perfect credit. You also might consider a rent to own or a lease option.
The other thing to be aware of is that a 620 credit score just gets you into a mortgage. This is not the best mortgage product out there, this is a low qualify mortgage product. Therefore, why not work to improve your credit and then get into a good mortgage product. In fact, mortgages get exciting once your score is 720! At a credit score of 749 mortgages get down right fun!
Here are some links that will help you pull your FREE credit report and your FREE score. If you need help reading your credit report, let me know and I can assist you. Take care.
The Credit Repair Expert
FREE Credit Report
FREE Credit Score
While every lender is different, in most cases, you will be charged a penalty if your credit scores are below 660 or 680. As the number of lenders who offer mortgage for thsoe whose credit scores are below 620 are limited, you can expect to pay even higher penalties.
You will be better off to determine what is causing you lower credit scores and work to resolve those issues before applying for a mortgage.