Do I need to have good credit to buy a home?

Asked by Mary Tangelmar, Kapolei, HI Fri Jun 3, 2011

I do not have a good credit. I do want to buy a home someday. I want to know how do I start to get a home.

Help the community by answering this question:

+ web reference
Web reference:


Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Thu Jul 11, 2013
Good afternoon Mary,

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.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
1 vote
Jan Baer, Agent, Littleton, CO
Sun Dec 27, 2015
Hi Mary,

the best ways to improve your credit score is to:
1. Pay all your Bills on time, all the time
2. Keep your credit card balances low
3. Only open new credit when you really need it.………

good luck!
0 votes
Cathy Pierce, Agent, 96707, HI
Wed Jul 10, 2013
It can be a difficult and long road to fixing poor credit. The best place to start is to make sure you pay everything on time from here on out and try to rely on credit for only the essentials. If it's not an essential then save up for it and pay cash. You end up paying a lot less for the item in the long run.

You could also subscribe to one of the credit reporting agencies and monitor your credit monthly (to make sure it's accurate). They also have tools that will show you if you do X then your credit will raise by X points. By keeping an eye on your own credit you can not only correct any mistakes but possibly catch fraud or identity theft before it's too late.

Also, your credit may not be as bad as you think it is. There are plenty of lenders who will take a look, make recommendations and then find programs or wait for a program to come along that will work for you. Local lenders are best since there are programs for Hawaii residents that only local lenders have access to and these are great for first-time buyers (they help with money down assistance). If you would like the name and number of a good local lender or two please let me know.

Catherine Pierce
A House-SOLD Name!
0 votes
Carmen Brode…, Agent, Scottsdale, AZ
Tue Jun 7, 2011
There are loan programs for almost everyone. Credit guidelines have relaxed in the past year. You may be surprised to find out that you qualify. Check with a local loan professional.
0 votes
Frank Diaz, Agent, Honolulu, HI
Fri Jun 3, 2011
Hi Mary,

Lenders have a variety of programs available to buyers based on credit scores, employment and cash reserves.
If you would like a few recommendations, let me know. I always recommend talking to at least 2, if not 3 lenders.

0 votes
Gerard Carney, Agent, Spring Hill, FL
Fri Jun 3, 2011
Mary look at the question and answer honestly to yourself. Understand that you may be able to get financing even with bad credit but you will pay out the nose for it. My advice is to take 6 months to a year and make a very big effort to better you credit, if you need help learning how, call me or call a professional that will give you advice on how to raise your credit score! Good Luck and I hope you the best on all your endeavors!
0 votes
Monique Ting, Agent, Honolulu, HI
Fri Jun 3, 2011
You got some very sound advice from Linda & Don.
I just want to add that in addition to a "good credit" you should also have a steady job & some cash set aside for down payment & closing costs. The 100-105% financing is a thing of the past!
Please let me know if you would like get in touch with a mortgage broker that could see whether you qualify as a home buyer!
You can email me at or call me at (808)292-6327.
0 votes
Linda S. Cef…, Agent, Franklin, WI
Fri Jun 3, 2011

Don gives you excellent advice. If you have the dream to own a home, YOU WILL. Many people today have not so great credit and I won't go into all of the details of why I believe that happened. I do encourage you to talk to friends, family, co-workers, etc...........people you trust and have respect for that have already been through this.

Don is so on the mark when he states that it could be 6 months to two years, but don't give up. The key is to find a loan officer that is patient and knowledgeable and willing to work with you to repair your credit. I have seen this accomplished in a very short term depending on the debt origination.

When you do get those scores up to where they need to be and you begin the search for your home, the things you need to look at are big ticket items. In Wisconsin, that would be roof, furnace, central air and foundation. In Hawaii, I'm sure those items would be different.

Shop around and ask lots of questions. Find a good agent and commit to them and they will work hard for you.

I wish you good fortune in your search. Come back and let us know how you're doing from time to time. We do look for you and how things worked out and we love to hear about the success stories.
Web Reference:
0 votes
Don Tepper, Agent, Burke, VA
Fri Jun 3, 2011
No, but it helps greatly.

Work on cleaning up your credit. Many of the responses here will be along the lines of: "Check with a mortgage broker. Your credit may or may not be that bad. You need to find out for sure."

And that's OK advice. But you're probably a pretty good judge of your current credit. Then take that next step and work on improving it. Bad credit doesn't last forever. You say you do want to buy a home some day. Depending on how bad your credit is, and how much you can do to fix it, the day you can buy a house might be in the range of 6 months to 2 years away.

Hope that helps.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more