Bad Credit Doesn’t Mean No House Keys!

Written by on November 27, 2012 in Money - No comments | Print this page

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Certainly, your credit rating is important but it doesn’t have to be the obstacle to home ownership. If you understand how to work with this, then it can be the first step to a very profitable future.

Your credit takes time to correct but there are ways to do it on a fast track. Your debt-to-income ratio must be low in order to move ahead with the home loan application process. Credit cards can be a major obstacle in this area, so avoid impulsive purchases and unnecessary spending.

If you already owe high credit card bills, start making more than the minimum payment each month. This will help you make greater strides toward that lower debt-to-income ratio. Revolving accounts such as furniture rental and storage fees are other issues. Make sure these payments are not late and paid early, if you can. It will show up as consistent and on time on your credit report and raise your score.


Utility bills are just as important as credit card bills. These companies regularly report to the credit agencies as well as their own credit departments. Put these on a regular schedule so they are always paid on time and you’re not assessed unnecessary late fees. This will also serve to increase your credit score without any major changes in your budget.

If you do have major problems with your credit, talk to a credit consultant or a debt attorney. They may be able to negotiate settlement deals that are out of reach for you personally. Once they have contacted your debtors and arranged an agreement, stick to that payment plan. It’s also easier for them to negotiate deals like this on a shorter time frame, so if you’re in a hurry to buy a house, this can be a great tool.

Make sure you notify the financial institutions of any cash savings accounts you have. Even if these are not in a bank, you can show you do have some financial support and are able to put money away on the side. They want to see that you can manage your money responsibly before they approve your home loan application. This is why it’s important to keep records of any money you put away, whether that is held by a secure financial institution or not. When you’re ready to buy a house, remember there are cures for every credit problem and it is something you can overcome.

This is a guest post.  Article brought to you by OpenOffer.com, a real estate resource for Rancho Santa Fe Luxury Homes.

Image courtesy of jscreationzs / FreeDigitalPhotos.net

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