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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I specialize in Under 640 Fico Score Loans and offer credit repair at no cost to raise fico scores to qualify. Home prices and rates should be affordable to buy and pay less than you owed with a lesser payment too.
Sheryl Arndt, Real Estate Broker â€“ Sr. Loan Officer CA only
REO & Short Sale Specialist
20+ Years Experience
But in that time, you can work on getting that credit score increased.
The biggest problme is that, most likely, the creditors that you included in your bankruptcy may be showing you balances either active or charged off. They need to say discharged in bankruptcy.
That will help.
Also, try to acquire credit with a secured credit card. Little by littel you can get that to a minimum of 620 for FHA