I have a possibly negative credit score due to closed ATT wireless account received by 3rd party collections. I’m employed full-time at $11.50/hr, 40+ hours a week. I’m completely ignorant as to house buying strategies and awareness. I’m a DIY kind of guy and do not mind home repairs, though I do want a structurally sound house. Any and all help / guidance as to where to start is very much appreciated.
I would like to buy a house with little to no credit, and am interested in a liquidated / auctioned house. Where should I start?
When deciding to take the first steps needed to purchase a home, a great place to start is to pull your credit reports from www.annualcreditreport.com. Every consumer is entitled to a free credit report from all three credit bureaus (Equifax, Experian, & Transunion) once per year. Once you pull your report, review the report in its entirety to determine who is owed and devise a plan to pay down any derogatory accounts. If you need assistance with reviewing the report, visit www.nfcc.org and contact a credit and housing counselor near you to schedule an appointment. The counselor will be able to assist you with reviewing your credit report and helping you devise a debt repayment plan. It may also be beneficial to obtain your credit scores from the three credit bureaus as well. Unfortunately, there is a fee to retrieve the credit scores however you can visit www.myfico.com or www.scoresense.com to purchase them. Generally, a credit score of 620 or better is needed to purchase a home. Also, since you mentioned that your score may be low, it is a good idea to start determining ways to rebuild your credit score. Some consumers obtain a small personal loan or secured credit card from their bank to begin the credit rebuilding process. A secured credit card is a card offered by a financial institution that uses a deposit (usually a minimum of $300) to provide you with a credit card. The purpose of the card is to build your payment history/show future lenders that you are able to use credit responsibly and make payments in a timely manner each month. With a combination of paying off debts and rebuilding credit/payment history, your score should increase to meet your target credit score to purchase a home. Also, if you are going to purchase a home within 1-2 years, it may be a great idea to attend a 1st Time Homebuyer’s education course to learn more about the home buying process.
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