We’re not going to sugar-coat it: It’s harder to buy a home with bad credit than it is to buy a home with good credit.
But there is still good news: It can be done.
For most people, credit is the biggest obstacle to buying a new house. When your credit isn’t shining very brightly, you’ll have limited choices when it comes to home loans – and you won’t qualify for the best interest rates.
The best course of action is to work hard to clean up your credit while you save cash to use as a down payment. Follow these tips to begin boosting your score:
- Don’t pick up any new debt. Don’t buy a new car, get new furniture or anything else that requires you to take out a loan or have credit extended to you.
- Don’t apply for new credit cards. When you apply for credit, that’s a ding on your credit report. And when lenders see that you’re picking up new ways to get yourself into debt, they’ll be less likely to approve you for a mortgage loan.
- Keep an eye on your credit report. Use a free tool like the one Credit Karma provides to monitor your scores weekly. You also need to dispute items that are dragging down your score that don’t belong to you, which happens far more often than you think.
Are You Buying a Home in Aspen or the Surrounding Communities?
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