If Your Credit Score Isn't Any Good, Don't Count On Getting A Mortgage

If your credit score isn't any good, don't count on getting a mortgage. I have told people that time and again! Recently a friend told me her credit score was under 500 and she thought it was due to the bankruptcy she had 12 years ago. She wants to refinance her mortgage but with her credit score, she is unable to do so.

My first question was to ask her what credit cards she has. Response: none. I asked her if her current mortgage payments and car loan payments are on time. Response: car is paid off and mortgage payments are generally on time.

My advice to her was to make sure ALL of her mortgage payments are on time or even early if she has trouble remembering to get the check in the mail. I also advised that she get a credit card! Target will generally give just about anyone a credit card, so I suggested she begin there and if Target refused to give her credit, go to her local bank and get a prepaid credit card.

In addition to having a credit card, I explained that her balance should always be UNDER 30% of her credit limit. Use it and pay the balance off each month but never charge above 30% of the credit limit. I explained that you need to show a history of paying your credit bills on time in order to bring those scores up.

So many people have no idea how to help themselves improve their credit score and if you know what to do, it is relatively easy to get that score up.

 

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Barbara-Jo Roberts Berberi, MA

Charles Rutenberg Realty

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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

You gave her very good advice. It is about re-establishing your credit lines and keeping it clean.  

Mar 30, 2014 04:22 AM #1
Rainmaker
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Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Barbara Jo

That is good advice she will need 3 trade lines as I remember.  She has the hardest on a mortgage now 2 others.  Credit cards and or an auto loan.

Mar 30, 2014 04:25 AM #2
Rainmaker
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Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Barbara-Jo, you are right, so many people do not understand credit scores and how to establish good credit. In addition, many people do not understand how making late payments, or not paying a medical bill can significantly impact their score in a negative way.

Mar 30, 2014 04:55 AM #3
Rainmaker
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Robert Bob Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX ( West of Houston) Real Estate Expert

Barbara Jo, good advice from you to your friend regarding increasing her credit score or FICO number. Some folks, however, never get it. 

Mar 30, 2014 06:20 AM #4
Rainmaker
3,283,929
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Barbara-Jo.  I had a client that is a friend and after his mom past away, he got all this insuranse money and paid everything off.  He wanted to buy a house 3 years later and had no credit, luck his wife had a department store credit card, the loan had to go in her name.  He now has a gas credit card for the future.

Mar 30, 2014 07:25 AM #5
Ambassador
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Florida Tolbert Team Keller Williams Advantage
Keller Williams Advantage III Realty in Lake Nona - Orlando, FL
Keller Williams Land Division Specialist

3 tradelines after BK is the magical way back to higher credit scores.  

Mar 30, 2014 12:02 PM #6
Rainmaker
4,432,533
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the information. I am sure consumers with bad credit  will find it useful.

Mar 30, 2014 08:19 PM #7
Rainmaker
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Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Barbara-Jo. You have to work hard to have scores under 500 and a BK that is 12 years old doesn't have any affect on scores so many years later. You have her good advice and paying everything on time, including her mortgage.

Make a great week!

Mar 30, 2014 08:25 PM #8
Rainmaker
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Fred Hernden, CMI
Superior Home Inspections - Greater Albuquerque Area - Albuquerque, NM
Albuquerque area Master Inspector

It still amazes me that lots of people don't even know what their scores are! Credit ratings are something you should maintain, get your free scores once a year and look at it! Lots of times you can dispute incorrect entries and keep it maintained! Too important to ignore.

Mar 30, 2014 10:33 PM #9
Rainmaker
1,415,549
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Barbara Jo...times have changed for sure...it used to be if you could fog glass you could get a mortgage...no more!

Mar 31, 2014 02:42 AM #10
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Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

Thank you for all of the comments. People need to work with professionals since we know how to overcome obstacles like credit issues!

Apr 01, 2014 08:07 AM #11
Rainmaker
5,579,411
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Many  consumers pay too little attention to their credit standing until they need to borrow some money. Bad credit can be very expensive.

Apr 01, 2014 08:08 AM #12
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