For my entire life my mother who was presented with credit during her 20's always told me: You have to have good credit, build a good credit score so one day you can have a car or a house.
Now I"m about to be 40 and I look at my mother and say THAT'S CRAP!
Why in the world do we teach our children that it's ok to have DEBT! That's all the FICO score is people. And believe it or not, you CAN buy a house or a car without having a credit score.
But I digress...nope I did exactly as my mother taught me. Took out student loans, got credit cards, bought a NEW car with a very low paying job and guess what. TONS of debt. Gee not long after I was in default and behind on everything. HMM kinda sounds like our housing crisis doesn't it?
So now I"ve succumbed to a plan of attack. Budget, save, have an emergency fund, and NEVER use a credit card again. (Debit card ok). And guess what people.. I don't give a HOOT what my credit score is. Am I perfect..NO. But I am debt free finally and determined never to be there again.
So for my buyers, sellers, friends and now of course family (mom included) I practice what I preach. Not only in real estate but in life. Do things the right way, have a down payment, keep current on your rent, utiliities, cell phone, ect..and guess what? You have a good credit score and you will be able to buy a home. Here's the breakdown.
FICO measures the way you handle debt: 35% payment history, 30% amount of debt and 15% lenth of credit history, 10% type of debt, and 10% applying for new credit. (per the Dave Ramsey Total Money Makeover training)
It's the I LOVE DEBT score! Bottom line..you can get a mortgage with manual underwriting by being on a job for 2 years and paying your rent early and on time. It does work people. If you have questions I'll tell you how we did it!
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AMEN, You must follow Dave Ramsey! I am working my way out of debt and almost debt free except my house. Life is much easier to live when you don't have all those bills.