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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Lots of folks with low credit scores are working on improving their scores through credit counseling and some will enter the real estate market later this year well prepared to purchase. Credit counseling is more than just assistance to improve credit scores, it is in many ways a path to financial awareness. Good luck and I wish you all the best.
B) Credit score minimum is normally 640. Work with a lender to determine an action plan to improve your credit score.
C) Cash is your best bet or wait until you improve your score then seek to purchase with a loan over $50k.
D) Do not low ball on a property that is already at a low ball #. You will have competition. CASH investors are ACTIVELY seeking investment opportunities and have the cash to back up their offers.
Most lending institution will not originate a home loan for under 50,000. The practice is consider predatory lending and it cost a lending institution way to much money to originate the loan.
If you belong to a credit union or something you may have a better chance.
Best of luck.
Nick Radakovich Home Sales Realty
In the meantime, work on your credit score. Get a prepaid card and develop good credit and dispute all the negatives with all 3 bureaus. If the creditor does not confirm it within 30 days, it comes off.