Home Buying in Lancaster>Question Details

Shantel, Home Buyer in Carrollton, TX

How realistic is it to be a first time homebuyer (Dallas/Ft. Worth area) with a low credit score of about 540?

Asked by Shantel, Carrollton, TX Sun Jun 27, 2010

Help the community by answering this question:


Hi Shantel,

Having a mid-score off 540 is low. I always tell customers you need at least a 620 mid. Good news is you can improve your credit score. I would either contact a good credit specialist or lender who can assist you. Let me know if you need a referral. I know a great lender that offers credit repair at no cost to the buyer!

Please feel free to contact me at your convenience. i look forward to hearing from you!

Make it a Blessed Day!

Tamika Turner
"Buyer's Agent - New Home Specialist"
Hendrickson Realty Group
Cell: (972) 697-1178
Fax: (682) 222-1049
Email: Info@NewHomesInDFW.net
Website: http://www.HendricksonRealtyGroup.com
0 votes Thank Flag Link Tue Jun 29, 2010
You will need a minimum of a 580 and even with that score you cannot have any recent collections (within the past 12 months). My first advice would be to speak with a good local broker or lender who can work with you over the next year or however long it takes to get you back on track. You need to look at what is hurting your scores now.

Is the damage already done and you just need to move forward start building new credit or are there things you can do now to stop the bleeding and get back on track? Be careful of the credit repair companies. Many over promise and under deliver... but all will take your money. Take some time to educate yourself on credit and what helps and hurts your credit. Open up a secured credit card with a bank by giving them money to deposit on a CD. This way you can get a credit card that reports to the credit bureau and that will help your credit. Never charge more than 40% of the max limit or you can actually hurt or limit the benefit of having that credit card reporting to your credit bureau.

Good luck on your journey... it may take a while but if you take the time to educate yourself and learn from the past problems you had you will we well on your way to rebuilding your credit for the future. It may take a while but you can do it... you can hurt your credit as quickly as cutting yourself... but repairing it is like the healing process... it takes time.

Good luck.
0 votes Thank Flag Link Mon Jun 28, 2010
As the others say, it's not going to happen with a credit score of 540. You'll have to improve your score substantially.

But it's not just raising your credit score. Your credit score is a reflection of your past spending habits. It's telling you that you've made some mistakes, or used some poor judgment. Figure out what those mistakes were. (I figure you probably already have a good idea.) Then work not just on improving your score, but on reshaping how you handle money. And you can do it.

When you're in a better place, you'll be ready to buy.

Hope that helps.
0 votes Thank Flag Link Sun Jun 27, 2010
Don Tepper, Real Estate Pro in Burke, VA
Shantel, I am a Realtor serving southern Dallas County, Ellis, Johnson, Kaufman and Hill counties. The previous answer out of New York is a very good answer. I want to give you hope though, if you are sincere about owning a home it is definitely a possibility. But you and you alone can make it happen by proactive in paying your debt and paying it on time every time. Stop using credit as much as possible and concentrate on cleaning up what debt you already have. I have several clients who did not have good credit, they listened to the advice of a lending professional, worked hard and in time (as little as one month and as long as a year) we have been successful in getting them their first home.
If you buying in a rural setting there are programs available to assist with your downpayment and closing costs once your credit justifies a loan. Also Dallas County has some programs available to assist with your housing purchase. There are also special programs to assist if you are a teacher, health care professional, policeman, fire fighter, etc.
But first and foremost before being able to qualify for this assistance your must improve that credit.
Shantel, IT IS POSSIBLE! If you would like to discuss this further or if you would like me to put you in touch with a lender who can assist, give me a call at 972-841-9611.
Do not give up hope. And NEVER pay anyone who claims they can clean up your credit for you - you can do it yourself with patience and time.
0 votes Thank Flag Link Sun Jun 27, 2010
Best clear your credit issues 540 credit score is extremely low IF you were to continue searching have mortgage brokers pull your score will tank it even further.

If the credit issues ARE less than 2 years best locate a property lease the move forward with credit repair

IF the issues ARE MORE than 3 years repair the credit with a GOOD company who follows federal statues you can have clear credit within 90 - 120 days.

If you lease properties with low credit scores you would anticipate pay double OR triple in deposits AND 1st months rent. Apartment complexes are kinder on our "wallet for move in than " single family homes.

If you need assistance contact my office.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sun Jun 27, 2010
Unless someone comes on to say that they are bankers who sell directly to the Ginnie Mae pool, and have seen them accept as low as 540, which I doubt, you are not being realistic. What you should think about is working on improving your credit score. You can start by making on time payments. Next, look at any collection accounts or charge-offs that you have, and pay them off. Don't negotiate a lower payment, because that does not really help you. It will stay on your report as paid for less than agreed. I know that there are some people who will tell you not to worry about older accounts, but I don't agree with that. If you have credit cards that are still open, use them and pay them, not only by the due date, but the day you get the bill. All of this will help raise your score.
Last year, a friend of mine who was going through a divorce had me run her score, and it was a 585. Mostly this was because of late payments. We looked through what she had, and what was still open. I told her to take the cards she had, use them for a relatively small purchase, and pay them off right away. By 6 months ago, her score rose to 665, which was fine for what she was going to need to do. She now has her house sold, so I ran it again, and she has a 712.
0 votes Thank Flag Link Sun Jun 27, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer