Even if your credit is less than perfect, no downpayment financing may still be a realistic proposition. There are a few basic things lending institutions look for on 100% deals if your credit is somewhat damaged.
1. Are all of your bills currently up to date? If you are running a payment behind on a car loan or credit card, or if you have had a bill go to collections, get it up to date!
2. Have you had your credit established or re-established for at least 12 months? Sometimes after credit issues, such as a bankruptcy, getting a credit history going again can be a real challenge. Consider a secured Visa or Mastercard as a starting point - after 6 month worth of payment history you will have a credit score (Beacon score) which will make it much easier to obtain car loans, personal loans or even a mortgage.
3. Avoid excessive credit inquiries. Every time you apply for credit, a record of that inquiry is kept on your file for a period of 3 years. Applying too often within a fixed period of time can do you more harm than good.
4. Keep your credit card balances clear every month if possible. Every time you have a card that is more than 50% utilized, your credit score drops. If you have a card that is over it's credit limit, your credit score will drop a great deal.
Most borrowers never improve their credit simply because no banker or lender has ever taken the time to go over their report, and help them put a plan in place for success. With patience and a little hard work, many of these clients can become homeowners sooner than you think.
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