# How to get a mortgage approved with Bad Credit Score?



## marther28 (4 mo ago)

How to get a mortgage approved with Bad Credit Score?


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## Fishindude (May 19, 2015)

Get somebody with good credit to co-sign, or have significant paid for collateral to support the loan.


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## Terri (May 10, 2002)

One way is to improve your score. 

In general, there are 4 main things that go into a credit score:

A history of timely payments matters most.
The amount you owe is a big factor.
Having unused credit makes you look good.
Applying for new credit can lower your score. 
Saving up a down payment can also be a challenge: it was for me. But, when my car was paid off I started putting the amount of the car payment in the bank every month. When I (finally!) found a place I could afford to buy I already had the down payment waiting in the bank, and my credit was good enough


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## Solar_Toad (10 mo ago)

in my experience, home mortgage planning begins a year _before_ you walk into (or click on) a mortgage lender.

• cure all credit/loan delinquencies.
• pay off as much outstanding debt as possible.
• save 20% of your _take home_ pay each check.
• make it a habit: always live on less than you make.
• start tracking and saving *all* banking and financial documents

saving 20% of your _take home_ pay *prior* to applying for your mortgage may sound unreasonable, but that is the _maximum_ amount your monthly mortgage payment should be equal to. so if you cannot save 20% _BEFORE_ you take out a mortgage, you can't afford the mortgage to begin with. this will be your down-payment.

your down-payment should be 20% of loan value, to avoid PMI (mortgage risk insurance) which raises your monthly payment. while not an absolute requirement, it is highly reccomended. avoid all 0% down-payment options.

this is likely the biggest investment of your life. be honest with yourself about it, and what it takes. if you cant be honest with yourself about your financial situation, and responsibilities, you will to turn your dream into a nightmare.


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## Big_Al (Dec 21, 2011)

My problem was I had NO credit score.
I had no credit cards, no vehicle loans, no loans of any type.
My wife and I paid cash for everything.
I had $10,000 to put down and was able to get the mortgage, albeit at a higher interest rate.


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## FirstLast (Jun 1, 2020)

Big_Al said:


> My problem was I had NO credit score.
> I had no credit cards, no vehicle loans, no loans of any type.
> My wife and I paid cash for everything.
> I had $10,000 to put down and was able to get the mortgage, albeit at a higher interest rate.


That doesn't seem fair. Do you think it would have been better to get a credit card and use it for a few months, then pay it off just to establish good credit and get a better interest rate?


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## po boy (Jul 12, 2010)

marther28 said:


> How to get a mortgage approved with Bad Credit Score?


What is your credit score and why is it bad??


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## Solar_Toad (10 mo ago)

FirstLast said:


> That doesn't seem fair. Do you think it would have been better to get a credit card and use it for a few months, then pay it off just to establish good credit and get a better interest rate?


a credit card is not really the best option to take, in that respect.

it is better to take out a small loan.

find something that is actually a necessary and justifiable expense, and take a loan on it. ideally, have the value of that item already saved up, or at least 50% of the value of it, in cash savings.

make the payments on that item for 9 months. longer if you can afford to, time-wise. 12 months is really the minimum for effect on credit, but let's just hope 9 months does something.

while credit cards do have an effect on your credit rating, they have less impact than an actual secured loan.

once you have begun to establish credit with a secured loan product, you can add a credit card to diversify.

just know that playing the credit rating game is a money losing endeavor. it is also a "necessary evil" if you want a mortgage. you have to borrow money, and pay interest as a penalty, to prove to "them" that you can borrow money, to pay interst as a penalty.

my wife and I live debt free. well... at least we did, for the last 3.5 years, until we took out a construction/mortgage loan to build our new house.

prior to the new home mortgage, we had paid off our existing home in May 2019. prior to may of 2018, our only debt was our mortgage.

mortgage is the only "acceptable" debt in our mind. we pay cash for everything else, or we just don't buy it.

The last non-mortgage loan we/I had would have been on my wife's 2014 mini-cooper, we purchased in 2014. we paid it off in about 7 months.

prior to that, i cannot remember the last loan i had. most likely on a car. we do not take loans out on cars anymore. we save cash, and pay up front.

that said, I did play the "credit score game" for lots of years. I was good at it. when we applied for our construction mortgage 5 months ago, my credit score was 820. I got that by playing their stupid game, but I am not a fan of it.


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## Adirondackian (Sep 26, 2021)

The weirdest thing that Ive never understood about credit is that if you dont have any credit cards or any debt, your score will be LOWER than if you do. Somebody who manages to stay out of debt...you would think that would be a smart credit risk? But for some reason they dont see it that way.


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## po boy (Jul 12, 2010)

Underwriting is automated and lenders like slam dunks.

For u all without a score.

Mortgage lenders do have non-traditional credit guidelines.
Non-traditional credit guidelines from Fannie
FHA


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## JosephSeiss (May 3, 2017)

Adirondackian said:


> The weirdest thing that Ive never understood about credit is that if you dont have any credit cards or any debt, your score will be LOWER than if you do. Somebody who manages to stay out of debt...you would think that would be a smart credit risk? But for some reason they dont see it that way.


Because we have an economy that runs on debt. Fewer borrowers mean the money lenders can’t play with your money and make more money. There’s no “there” there. It’s an economy whose underpinning is debt. Bailey Buidling and Loan is the bane of Potter’s Bank.


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## kinderfeld (Jan 29, 2006)

Adirondackian said:


> The weirdest thing that Ive never understood about credit is that if you dont have any credit cards or any debt, your score will be LOWER than if you do. Somebody who manages to stay out of debt...you would think that would be a smart credit risk? *But for some reason they dont see it that way.*


Reason being, that says nothing for how well you'll pay back _their _money. 
Good credit means good credit references, a history of timely payments, etc.
Nothing weird at all.


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## kinderfeld (Jan 29, 2006)

FirstLast said:


> That doesn't seem fair.


It's not about fair. It's about risk.


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## kinderfeld (Jan 29, 2006)

marther28 said:


> How to get a mortgage approved with Bad Credit Score?


Why is it bad?


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## 67drake (May 6, 2020)

Which is why I don’t really pay attention to my credit score so much. My wife checks hers all the time, like it’s a status symbol or something. I have no debts, and am not going to finance anything in the future, so it doesn’t matter. My wife says “You never know when we may need a loan”. I say “For what!?”


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## kinderfeld (Jan 29, 2006)

Smart lady.

This statement...


67drake said:


> “*You never know* when we may need a loan”


...answers this question.


67drake said:


> “For what!?”


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## 67drake (May 6, 2020)

kinderfeld said:


> Smart lady.
> 
> This statement...
> 
> ...


We don’t finance anything.


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## JosephSeiss (May 3, 2017)

67drake said:


> We don’t finance anything.


Your way is the best if it works. My cousin was always reliable with money. Never had a “good” paying job but he got by. He saved 10% of every dollar he made. When he applied for a home loan there were problems because he had ZERO credit. He could walk into the S&L he had since age 3 and get a loan for a car easily, but nothing else. Either way, they were able to overcome the credit issue creatively. These days he’s retired, still has ZERO credit and buys everything cash. He has health insurance, so, why would he EVER need a loan? “But, muh, unforeseen expenses, new roof…”. No, he’ll cut a check for that. People heavily invested in the system the way it is, or who need to take advantage of it really can’t figure him out. I wish I had led my life that way earlier on, but life threw me a few curveballs and then I got stuck as an indentured servant to the money lenders. I’m trying to remedy that currently.


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## GTX63 (Dec 13, 2016)

Adirondackian said:


> Somebody who manages to stay out of debt...you would think that would be a smart credit risk?


I learned many years ago from a wise banker, that bad credit is better than no credit.


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## GTX63 (Dec 13, 2016)

JosephSeiss said:


> “But, muh, unforeseen expenses, new roof…”. No, he’ll cut a check for that. People heavily invested in the system the way it is, or who need to take advantage of it really can’t figure him out. I wish I had led my life that way earlier on, but life threw me a few curveballs and then I got stuck as an indentured servant to the money lenders. I’m trying to remedy that currently.


I have had similar conversations with folks that struggle to understand. I have used credit and debt to make a lot of money and I have used a cash based lifestyle to make more. It is a lifestyle choice. The same people who cannot understand paying with cash many times don't understand how people live isolated, growing their own food and living detached from modern society. 
My son in law is a very successful investment planner as well as a stock trader. He gets it.


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## 67drake (May 6, 2020)

JosephSeiss said:


> Your way is the best if it works. My cousin was always reliable with money. Never had a “good” paying job but he got by. He saved 10% of every dollar he made. When he applied for a home loan there were problems because he had ZERO credit. He could walk into the S&L he had since age 3 and get a loan for a car easily, but nothing else. Either way, they were able to overcome the credit issue creatively. These days he’s retired, still has ZERO credit and buys everything cash. He has health insurance, so, why would he EVER need a loan? “But, muh, unforeseen expenses, new roof…”. No, he’ll cut a check for that. People heavily invested in the system the way it is, or who need to take advantage of it really can’t figure him out. I wish I had led my life that way earlier on, but life threw me a few curveballs and then I got stuck as an indentured servant to the money lenders. I’m trying to remedy that currently.


Well, if you’re broke, and just starting out in life it would be an issue. I DID finance my home, and a vehicle before, but those are long paid off. We have cash and investments on hand, so I don’t understand the wifes obsession with her credit rating. BTW, both of ours are great, but she worries if it drops a few points. No big deal to me.


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## Adirondackian (Sep 26, 2021)

JosephSeiss said:


> Your way is the best if it works. My cousin was always reliable with money. Never had a “good” paying job but he got by. He saved 10% of every dollar he made. When he applied for a home loan there were problems because he had ZERO credit. He could walk into the S&L he had since age 3 and get a loan for a car easily, but nothing else. Either way, they were able to overcome the credit issue creatively. These days he’s retired, still has ZERO credit and buys everything cash. He has health insurance, so, why would he EVER need a loan? “But, muh, unforeseen expenses, new roof…”. No, he’ll cut a check for that. People heavily invested in the system the way it is, or who need to take advantage of it really can’t figure him out. I wish I had led my life that way earlier on, but life threw me a few curveballs and then I got stuck as an indentured servant to the money lenders. I’m trying to remedy that currently.


Ive never had a loan except recently for my truck. I paid for my farm in cash, have no credit cards. I never had health insurance but recently joined "medishare" which is a christian health sharing network [ kind of like insurance ].

Works for me...new roof? At this point Ill get up on the roof myself and replace tiles as needed. Im always amazed at how cheaply things can be fixed and how expensive any contractor will be. The only people I'll call are electricians and plumbers...and how often do need one? Every ten years or so?

Other than that, my philosophy is that if I dont have the money NOW, how will I pay that much back later? Better to wait and save or sell something to raise the funds.


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## FirstLast (Jun 1, 2020)

I can learn a lot from you guys. Thanks!


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## GTX63 (Dec 13, 2016)

Cash only isn't for everyone. There are employers that won't hire you without a good credit score. I have known many people who could lose about everything today and tomorrow have the skills to borrow and invest and make it all back in short time. Our economy is built on credit, and if everyone paid cash we would be in a whole different world, with different issues. Using cash only can be very liberating, but it requires the right individual, the right mindset and discipline.
If you lack the latter two of the three, a good depression can be a great aid.


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## coolrunnin (Aug 28, 2010)

GTX63 said:


> I learned many years ago from a wise banker, that bad credit is better than no credit.


Gee, imagine banker saying anything else. Lol


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## MoonRiver (Sep 2, 2007)

I think you have all been trolled.


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## Solar_Toad (10 mo ago)

MoonRiver said:


> I think you have all been trolled.


trolled? doubt it.

more likely just someone who is not actually that invested in their question.

probably didn't like our reality intruding on their fantasy.


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## Danaus29 (Sep 12, 2005)

Do they have banks in Turzakistan?


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## GTX63 (Dec 13, 2016)

I hope. I just sold a car to a Turzakian Prince who mailed me a cashier's check.


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## Danaus29 (Sep 12, 2005)

I hope you won't have to pay too much to the delivery company who comes to get the car. But I'm sure the check will cover that cost.


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## GTX63 (Dec 13, 2016)

He wants cash so I'll pay him in his own currency for being a stand up guy.


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## GREENCOUNTYPETE (Jul 25, 2006)

trolled , phished , used 

insert your appropriate term here 

OP can feel free to prove me wrong with follow up or actual discussion.


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## MoonRiver (Sep 2, 2007)

Solar_Toad said:


> trolled? doubt it.
> 
> more likely just someone who is not actually that invested in their question.
> 
> probably didn't like our reality intruding on their fantasy.


When someone's first post is one that will likely be answered with a link to a website with the solution, it is a troll.


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## JosephSeiss (May 3, 2017)

MoonRiver said:


> When someone's first post is one that will likely be answered with a link to a website with the solution, it is a troll.


That may be, though no link has been forthcoming. Either way, it gave me a chance to vent, so I dont care. I’d ignore the link (if one is provided) anyway.


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## FirstLast (Jun 1, 2020)

GREENCOUNTYPETE said:


> trolled , phished , used


Some responses were helpful to me so their trolling failed, at least partially. Not that I need another mortgage but ya never know.



MoonRiver said:


> When someone's first post is one that will likely be answered with a link to a website with the solution, it is a troll.


I'm glad I didn't start out with some goofy question then!


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## GREENCOUNTYPETE (Jul 25, 2006)

FirstLast said:


> Some responses were helpful to me so their trolling failed, at least partially. Not that I need another mortgage but ya never know.
> 
> 
> 
> I'm glad I didn't start out with some goofy question then!


after a while you get used to the questions or users that are drop in once , spam , looking to start a fight , bots , phishing for a way to direct you to their web site or some other thing.

if someone wants to prove they are not then joining in discussion is the way to go and not just likes and yups to boost your count


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## Northof49 (Mar 3, 2018)

With no credit or bad credit for Mortgages it's best to find a "Private Mortgage" Private mortgage lenders often take on 2nd or 3rd mortgages so are willing to take higher risk.
Sometimes you will find an ad in financial section of newspapers or find a mortgage broker company that is not tied to a specific bank. They usually have a list of willing lenders but do attach a fee if you sign end up using their service.
Should be no fees to find out.


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## frogmammy (Dec 8, 2004)

This is the second time that specific question has been asked, in the same way.

Mon


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## Fagaro (4 mo ago)

If your credit isn’t where you want it to be but you can’t wait to get into a home, consider looking into an FHA (Federal Housing Administration) loan, which is backed by the government.


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## 67drake (May 6, 2020)

Fagaro said:


> If your credit isn’t where you want it to be but you can’t wait to get into a home, consider looking into an FHA (Federal Housing Administration) loan, which is backed by the government.


And with the current administration, they might even pay it off for you…..


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## Danaus29 (Sep 12, 2005)

67drake said:


> And with the current administration, they might even pay it off for you…..


I don't know whether to "haha" that or be angry about it.


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