Bad Credit? Good News: You Can Still Buy a Home


Your credit score is one of the major factors that influences any big financial investments you make, including buying a house.

So, what if you have bad credit? Are your dreams of a white picket fence and two-car garage out of the question?

Not so fast. You can buy a home with bad credit – it just takes some extra work.

How to Buy a Home with Bad Credit

Here’s the deal: If you have bad credit right now, you need to immediately start taking steps to rectify the situation. Start boosting your credit in little ways, build up your trustworthiness, then set a timeline for when you hope to buy.

1. First, Start Paying Bills on Time

This is the easiest way to immediately start boosting your credit score. Of course, you may have to rethink your spending each month in order to get your finances in order.

Look into setting up a monthly budget, then have your bills paid automatically each month from an account you can keep in the green.

2. Begin Paying Down Debt

If your credit card debt is looming, start hacking away at it bit by bit. Decrease your spending and funnel away as much as you can to begin paying down the debt. Your credit report is healthier if you don’t use up over one-third of your available credit.

3. Look Into the Right Loans

Loans offered by the Federal Housing Administration are designed to help people with average credit buy homes. For example, with a low score like 580, you can get a loan with a smaller down payment than your average mortgage.

4. Check Your Report for Errors

You can request a free copy of your credit report from the “big three” credit-reporting agencies. Look it over for errors, and if you find any, report them immediately to the credit company. They’ll get in touch with the credit bureaus to have the mistake removed – which can help your score.

5. Consider Financial Planning and Budgeting Help

If buying a home is a major dream for you, but you’re struggling to figure out how to save your money situation, turn to money management help or financial counseling. For a small fee, they’ll help you create a budget, rein in your spending, and make a plan to get back on track.

You Can Buy a Home with Bad Credit – But Get Ready to Work

Bad credit isn’t the period at the end of the sentence. Instead, it’s an ellipsis. There are things you can do to improve your finances and start building your credit back up.

Thankfully, once you start making positive changes, they can easily snowball. The farther you go, the easier it will get to be responsible with your money. Soon, you’ll be swinging open the gate to that white picket fence and strolling up the walk to your new home.