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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So are you trying to rent a place? You should get in touch with property management companies and inquire about their policies for renting. Some may work out a plan to enable you to rent a suitable place.
In the meantime, take a look at MyFico.com for advice on how to improve repair your credit and improve your scores
If your plan is to buy a home some day, all the more reasons why you should follow the advice from MyFico.com. You should also consult with a mortgage broker who can give you some guidance on what it will take to qualify for a loan.
Your "bad credit", however, may be an obstacle to you getting preapproved. Without that preapproval, what that tells us, as Realtors, is you won't be approved for your loan, and therefore can't really purchase... and you'd be wasting your time, as well as ours, and the listing agent and seller. We're not really big into working for free.