Over 33 million Americans struggle with bad credit and the number is increasing. The skyrocketing cost of homes, transportation, schooling, etc only exacerbates the situation. Living paycheck to paycheck has become a way of life and for some these paychecks can barely cover their monthly expenses.
If you are one of these consumers and are thinking about owning a home, you may feel that this is completely beyond your reach. Chances are, you have an average FICO credit score or a below average credit score. Even if, you have a low FICO score, this should not deter you from pursing the dream of homeownership. Studies have shown that homeownership is one of the best ways to build wealth for yourself and for future generations.
So the answer to the question "Should You Buy A House When You Have Bad Credit?" is a resounding "yes".
The first thing you will need to do, in your quest to buy a home is to understand your credit. You can take advantage of the free government credit report issued by Experian, Transunion and Equifax. Once you get your credit report, review it to ensure that all the information on the report is correct. If you see any red flags, take steps to dispute any errors on your report. Go to poorcreditgenie.com/fixerrors.html for information on how to dispute credit report errors.
The internet has made the mortgage industry an increasing competitive field. Even premium large banks, who wouldn't give low credit consumers the time of day a few years ago, now have entire divisions dedicated to "less-than-perfect" credit consumers. For resources and companies, who specialize in bad credit home loans, visit www.poorcreditgenie.com and take advantage of these programs.
The fact is, your interest rate will be higher than a person with a great FICO score but you can work on improving your FICO score and then refinance your home loan at a later time. Houses are not getting cheaper, so it may not be worth it to sit on the sidelines and wait four to five years for your credit score to be perfect before embarking on the American dream.
Delia Galley writes about debt management credit counseling and offers free advice on how to improve your FICO score. Visit her website at for free advice and resources on bad credit loans, the statute of limitations on credit card debt, wage garnishment, the new bankruptcy law, dealing with debt collectors, etc.