How can you buy a house if you have bad credit?

Buying a house with bad credit is difficult. Most people spend a lot of time saving for a down payment and repairing their credit before even attempting to purchase a home.

One user said:
I STRONGLY urge you verify & VALILDATE your credit reports. Even the slightest change can affect your credit score -- which you should AT LEAST have a 620. Also, consider adding POSITIVE CREDIT to your reports.

Other options...
- pay down debt to bring your down debt to income ratios
- see if your credit card companies will INCREASE your credit limit, thereby, decreasing your debt to income ratio

If you have bad credit, you'll need to run your credit report to find out just how bad things are. The lower your score, the more difficult it will be to obtain a home loan.

After you know your score, work on raising it. Speak with a loan officer prior to doing ANYTHING with your credit. Paying off debt more than 4 years old is often worse for your credit than leaving it behind to fall off on it's own. This is because the older bad debt is the less it affects your credit. Once you make a payment, you refresh the date and reset the 7 year timer. It may not be morally right but if you were concerned you would have probably paid it off already. The "nonprofit" debt helpers are not really out to help you. They will try to spin how refreshing the debt and making monthly payments will have you out of debt sooner, but they take a $50 a month fee and refresh all of your bad debt, hurting your score. You could pay that $50 towards one of your debts and be paid off that much sooner and spend the time building new good credit rather than treading water in old, bad debt.

The best way to improve your credit score is to let your past be your past and begin making responsible payments in your future. Pay your bills on time and completely and make no excuses. Don't spend more than you can afford. Get a secured credit card if you need to and make a $5 purchase and a $5 pay off every month. This builds good credit which will make your past bad look so much less bad. It is nearly impossible to dig out of 7 years of debt, but it is easy to stay current and thankfully, that is really all it takes. Within 2-3 years your credit will be way up there, even if there is still some bad stuff hanging around from long ago.

Student loans and judgments must be paid.

In the meantime, starting putting some money aside each month for use as a deposit. The more you have, and the better your score, the better your odds of obtaining a reasonable loan.

You may also increase your equity, thus lowering the amount of needed loan. This will help ease obtaining a loan.