Want to Buy Your First Home? Don’t Let Bad Credit Stop You!
That perfect credit score is an elusive life goal. It can even become a game of cat and mouse that causes incredible stress, restless nights, and heated arguments with a significant other.
Odd how a number could have such considerable control over our lives.
But challenges like these are not as daunting or significant as you might think. With a positive attitude, innovative planning, and some discipline, you’ll find that your bad credit score isn’t as large of a challenge if you’re looking to buy your first home.
Follow these basic instructions to get started and you’ll be settling into your new home in no time!
Know The Ins & Outs Of Your Credit Score
The first place to start is to get your credit score and all of the details that credit reporting companies can provide.
The number is important, but you’ll also need to understand why your credit score is low. A solid credit score is 700 and each negative financial incident filed to credit reporting companies will chip away at this score.
So be sure to find out which aspects of your finances has been contributing to these negative reports.
They could be credit card debt, student loan debt, defaults on loans, etc… the point is to understand your personal financial status before you implement a plan to address these issues.
Credit Reporting Bureaus
The three main credit reporting bureaus are Experian, TransUnion, and Equifax. Each having different rules regarding the purchase or release of your credit report.
We recommend using NerdWallet’s free credit report tool. There is no cost to you and it won’t hurt your credit score when you make the request.
Plus, NerdWallet will provide a step by step guide, tailored to your personal credit score, history, payments, and debts.
Accurate Credit Score Information
This is a small recommendation but still important when checking your credit score. Be sure to review all of the reasons why your credit score was docked points. If there are inaccurate flags, report them and ensure your score reflects the updated information.
Don’t just accept the score as is!
Follow NerdWallet’s Instructions
We can’t recommend NerdWallet enough because they make it extremely easy to follow their step by step credit improvement recommendations.
What’s more is that they’ve done all of the research around credit cards that can provide additional boosts to your bad credit score. Finding one that’s right for you is simple.
Build Your Savings Habit
In many cases, a bad credit score is due to poor personal spending habits. Your credit card payment, student loan payment, etc… came up and you didn’t have the money to stay up to date.
It happens to everyone!
The key is to set up autopay so that you’re not tempted by the available cash in your checking account. Timing auto pay with biweekly payroll or even a percentage of each checking deposit will ensure you no longer forget or push back timely debt payments.
Consider a Higher Interest Rate
You can always renegotiate your interest rate in the future.
Biting the bullet on a higher interest rate now with the piece of mind of a possible renegotiation in the future, may just be the perfect plan if you’re looking to purchase your first home sooner than you had hoped.
Hundreds of thousands, even millions of people are in your exact financial situation, so don’t get down on yourself. Many have found success by following the instructions above and there are plenty of tips and tricks to follow along the way.
For instance, this particular individual decided to become pro-active in changing their bad credit situation around. By doing so it took them about nine months to get to a point where they could qualify to buy a house.
Also, having the right professionals to rely on can really speed up the process. There are plenty of experts that can help you build a better credit score and help get you on a solid financial footing.
What’s more is that a great realtor will become an advocate on your behalf when it’s time to buy that first home.
Your financial situation and credit score isn’t a life sentence. There are plenty of ways to build your credit and improve your financial wellbeing. Be prudent, stay determined and optimistic, and you’ll be building the life you want in a new home in no time.
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