How You Can Buy a House With a Bad Credit Score

Buying a home is integral to the “American Dream,” but it is increasingly out of reach for many hard-working adults.

The property market has been highly competitive over the last year because housing supply has shrunk dramatically.

While most of the older generations will have their own homes through retirement, less than half of the largest group in the workforce – Millennials – think they’ll have that same luxury.

A traditional mortgage is usually a fixed-rate loan, so the interest rate never changes. Although this is the kind of loan people typically think of, it’s only ideal for people with a credit score above 620.

Mortgage Options

Step-by-Step Guide for Buying a Home With Low Credit

Get Your Free Credit Report

The last thing you want is your credit score to be misreported. Go to annualcreditreport.com – you can get a copy of your credit report for free every year.

Review all of the information provided. Is your social security number accurate? Are your addresses up to date? Which debts and transactions are causing you to lose points?

Do What You Can To Raise Your Score

Unless you’re in a rush to buy a home immediately, take some time to improve your credit score as much as you can. Five factors determine your score.

You can sign up for a credit monitoring service to help you keep track of it all. An app called SmartCredit offers a paid service and is one of the more helpful options.

Like any other mortgage, you can get pre-approved for an FHA loan. Pre-approval can help you save time and narrow your search as you look for a home.

Try To Get Pre-approved

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