Some say that your credit score is your passport for access into the modern financial economy.
A good (higher) credit score can open doors to all kinds of financial products and loans to help you in a variety of ways financially. However a lower credit score can see you locked out of opportunities, including the ability to buy a house with credit.
Over the years, the mortgage lending community has worked to develop options for individuals and couples with "bad credit" which allow them to still be able to open the door to a new home.
Recently the folks at The Mortgage Reports wrote an article titled "Home loans for bad credit: 7 Loan options for 2022". The article does an excellent job of defining what the financial system deems "Bad Credit" vs "Good Credit" and offers some mortgage options that may be available to borrowers with lower credit scores.
Our lead Realtor, Mike Schoonover, did a brief review of the article in the video below:
If you have a bankruptcy, foreclosure, or other major negative financial event on your recent credit history, that still will likely prevent you from getting a mortgage in the short-term.
But, if your score is low due to a few minor credit defects or because you lack significant credit history, you may still be able to qualify for a mortgage.
So how can you know for sure? There are a couple of things you can do:
1. Check your credit report ... for free - You can visit AnnualCreditReport.com and get free access to your credit report from each of the three major credit reporting bureaus. You are entitled to one free report every 12 months from each agency.
Additionally, if you choose to, you can request your credit score from each bureau for an additional fee which varies depending on the credit bureau you are requesting it from.
When reviewing your report, it's important to look for any errors on the report and request to have them corrected. Each bureau will guide you on how to file a correction request. These errors can serve to bring you score down, so it is critical to get them corrected asap.
Also, be aware when searching for credit report websites. The only officially government approved site is AnnualCreditReport.com. However there are a plethora of companies on the internet who will sell you a "credit score" and a variety of other "services" to help you determine your credit level. Not all of these companies have your best interest in mind.
2. Talk to a lender - Another way to get your credit score, or to generally assess your ability to get a mortgage, is to talk with a qualified loan officer.
A quick phone call with a lender will allow them to gather some pertinent information from you and get your permission to check your credit history and score. Not only can the determine where you are in qualifying for a loan, but many lenders will offer guidance on ways you can raise your credit score to give you even better options for loans.
At the 812 Living Group, we work with several preferred lenders who can help you check your score, determine if you qualify for a mortgage, and can guide you through the different loan types to see which one would work best for you.
A good credit score gives you options. But a bad one doesn't have to mean you are shut out of the housing market.
If you have questions about credit scores and whether you would qualify for a mortgage, we'd love to help you. Not only can we connect you with one of our experienced and vetted lenders, we can even recommend a local credit repair specialist if needed.
It starts with simple conversation. Reach out to us at 812Living@gmail.com for more information.
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