I have a low credit score, should I still attempt to purchase a home?

I grauated college about 2 years ago. I have 3 credit cards ($500 max credit each) that I%26#039;ve had a pretty awful payment history with until about 6 months ago that I%26#039;ve been paying off regularly. I have a total debt of $2800. I make $40k a year and my credit score is under 500. I don%26#039;t know if it%26#039;s a good idea with my circumstance whether to really consider buying a house. What do I need to do to boost up my credit score and who will finance me for a hom loan? I didn%26#039;t have mommy and daddy to teach me about credit... so please offer realistic advice that I can use to purchas a home before end of the year

I have a low credit score, should I still attempt to purchase a home?

The real question is, %26quot;Can you afford a home%26quot;? Without knowing more detail (please don%26#039;t tell me), I can%26#039;t know for sure, but I would guess that you probably would have a difficult time making house payments in your current situation.

A credit score of 500 is rather low, you would not get the best rates. Also, if you are having trouble paying off things now, what would you do with a house payment on top of everything?

My suggestions are:

1) Pay off your current debt.

2) Keep current on future debt. A credit score is a measure of how you use credit and how well you pay it back as agreed. The higher the score, the more trustworthy you will look to a lender and the more likely they will be to give you a favorable interest rate.

3) Save, save, save. The more you can put down, the less you will have to finance and the lower your payments will be.

I have a low credit score, should I still attempt to purchase a home?

loan

Before you do anything pay off the credit card balances. Then start saving! Since you are carrying a $3k CC balance I assume that you don%26#039;t have a down payment for a house. During this time rent a reasonably priced house/apartment. You should have a bare minimum of 20% of the house price as a down payment. With your credit score your interest rates are going to be through the roof. My suggestion is to wait until you have the down payment, and continue to pay all bills on time. By the time you have built up a down payment you should have a reasonable credit score. Remember, banks are tightening down on loans because of the sub-prime lending crisis.|||Buying a house is a big committment, and can take a lot more out of your income than you might expect. I would worry less about your credit score as some lenders will provide even 100% loan amounts, and work on removing your credit card debt completely. Search for non-bank lenders to help with the loan, but go in debt free as this will help your situation.

You can use a number of online calculators to see how much you can afford to take out on a loan, and what your repayments will be. Your Mortgage (Australian) has a range of calculator tools that can help you get an idea of what you can afford, and read up as much as you can on the costs of home ownership - it%26#039;s not just the house but ongoing taxes, interest rate rises etc.

I think the best advice would be to pay off your credit cards completely, save as much as you can in 12 months for a deposit and then see what you can afford. Remember to buy well under your %26#039;maximum%26#039; to take into account interest rate rises, job loss or any other unforseen circumstances.|||The problem is that you are over your credit limit on your cards, which hurts your credit score. You should have no more than 30% of your credit limit being used on each card. Continue paying off the cards first. Once that is done, then start saving for a down payment on a house. The rule of thumb is that you can afford about 3x your salary for a home ($120K). You%26#039;ll need to save at least $12K for a downpayment.|||with a 500 score your going to need atleast 25% down to before they will even consider you.

don%26#039;t mean to be rude but how did you get it so low,

did you not have the moeny or something to make the payments or something.

Go take out a new debt conolidation loan, normalyy i don%26#039;t tell poeple to do this, but for 2800 it;s okay, once they dee that you make 40,000 per year you should be financable,

then make early payments and extra payments and have it paid off in full in about 14 months then your score will be probably 60 points higher, do not get any more credit cards, have only one with a limit of like 500 bucks just for emergencies.|||As you may or may not know it is very difficult to buy a house now for people with low credit scores (less than 700.) The stock markets are falling and companies are failing because they lent money to people who were not creditworthy at ridiculous rates they could not afford. So to be blunt you don%26#039;t have a lot of opportunity now as it stands, but that%26#039;s not to say there isn%26#039;t hope. First let me say that for you it may be cheaper and more financially sound for you to rent until you either get a better credit score or the housing economy improves again (which can take years). Fixing your credit score though won%26#039;t take as long so focus on that for now.

Here are my 10 steps you can use to build your credit score quickly. I raised mine to well over 700 points fro 500 using these steps in less than a year:

1. Know and Track Your Credit Score (be sure to sign up for the free trial of your credit score monitoring listed below. It really helped my get my score up.)

2. Never Miss a Payment, Starting Today

3. Never use more than 20% of your Available Credit

4. Keep Credit Cards that Have No Annual Fees Open For as Long as Possible

5. Extend Your Credit Limit on Cards You Already Have before You Get New Ones

6. Get Credit Cards that Have CashBack Rewards to Contribute to your Balance

7. Transfer Your Balance to a Credit Card with a Lower Interest Rate and a Higher Available Credit-

8. If You Think You Are Going to be FORCED to Pay a Bill Late Ask for an Extension or Payment Plan

9. Take out a Small Personal Loan and Repay it Over a Year

10. Ask Someone With Good Credit if They will Account Shadow you

When you%26#039;re trying to build a solid credit score it%26#039;s important to get a comprehensive view of what is actually effecting it...

Your Credit Score (also known as your MyFico score) is calculated with the following breakdown:

* 35% -%26gt; History of Payments

* 30% -%26gt; Debt to Credit Ratio (available credit)

* 15% -%26gt; Credit History (length of open accounts)

* 10% -%26gt; New Credit (are you expanding your credit)

* 10% -%26gt; Credit Types in Use (varied credit types from loans to credit cards)

If you excel in one area and lack in another, only fixing the areas which you lack are going to improve your score.

You can read more about these tips on my blog: How Can I Increase My Credit Score

* http://millionster.com/articles/debt/inc...

Hope this helps you! Focus on building your score because housing prices are likely to continue dropping for the next couple of years!