I have a 530 credit score,due to a horrible divorce...

Question

Im in the process of rebuilding my credit, but Im having trouble finding a rental house in my area.. Is it possible for me to qualify for a home loan?

Answer 1

There are lenders who finance properties for people with bad credit, but the rates are high and they require pretty large down payments -- a minimum of 25 percent in most cases. That said, FHA does allow 90 percent loans to people with scores as low as 500. Your best bet would be to pay your bills on time and wait until it's been at least 12 months since your last derogatory credit event (late payment, collection, etc.). Because FHA allows low scores but not a pattern of slow or missed payments, etc. If your credit was good before the divorce, and you can show that you're paying your bills now, you have a better chance of getting lenders to overlook it. but if it's been bad for an extended period of time, and was bad pre-divorce, you won't get a pass on the FICO.

Answer 2

Boosting credit is very easy. As long as you have been timely you can qualify for FHA LOANS. 580 credit scores required for 3 5% down payment FHA LOANS. Under 580 credit scores require 10% down payment under HUD GUIDELINES.  HUD is the parent of FHA. You have two options:
1. Come up with 10% down payment
2. Try to work on increasing you credit scores
How to boost your scores?
1. Pay down all credit cards to 10% utilization ratio
2. If you have no revolving credit, get 3 secured credit cards with at least $500 credit limit
3. If you cannot get 3, try to get at least one.
4. Add yourself on as authorized credit card user to a family member like spouse or someone with same last name
5. DO NOT BUY CREDIT TRADELINES FROM CREDIT REPAIR COMPANIES.  IT NO LONGER WORKS
I strongly recommend that you increase your credit scores as high as possible.  Higher credit scores means lower interest rates. Please write us back if you have any questions.  

Gustan Cho
Branch Manager of USA MORTGAGE
A Division of DAS ACQUISITION COMPANY NMLS 227262
The Gustan Cho Team at USA MORTGAGE
www.gustancho.com
Direct Lender With No Overlays On Government And Conventional Loans