If you have dreamed about owning your own home but thought it wouldn’t be possible due to bad credit, then continue reading to learn how IPS Amarillo can help. Many lenders require incredibly high credit scores in order for you to get the loan you need to purchase a home. We offer lease-to-purchase options on homes throughout Amarillo, which could be the ideal solution for your credit situation.
In today’s post, we’ll take a look at some of the common credit myths and facts so that you can begin to see the possibilities for your future. Contact IPS Amarillo today to learn more about how you can become a homeowner with our lease-to-purchase options.
1. It’s impossible to get credit if you don’t already have it
While it’s true that lenders look at your credit history and several other factors to determine the amount of credit they will extend to you, a lack of credit doesn’t mean that you cannot get a loan. One option is to have someone cosign with you on a loan, which means that they will be added as an authorized user on the account.
If you are unable to get a cosigner for your loan, then another good option is a secured credit card, which requires you to put up cash as collateral. Once you’ve decided on the best path to establish your credit, you need to make sure that you maintain good credit so that when your credit history is evaluated, your score can continue to improve.
2. A bad credit score lasts forever
Many people believe that once they have a bad credit score, it will last forever. The truth is that a bad credit score will continue to move in a negative direction as long as you continue to make bad decisions. It takes time, but your credit score will slowly move in the right direction once you begin to manage your credit well.
3. It takes a long time for a credit score to go bad
Unfortunately, while it takes time to bring your credit score up a good range, it does not take a long time for your credit score to move down to the poor range. In fact, it takes just a few months to ruin a credit score. If you continue to make poor decisions, then your account will be charged-off after six months, which is one of the worst things that could happen to your credit score.
4. Once your credit score is bad, it can never be rebuilt
People make financial mistakes from time to time, which negatively impacts their credit score, but it is not the end. For some reason, this credit myth continues to be passed around. The truth is that you can rebuild your credit score, it will just take time. Since your credit report is really just a picture of your credit history, that means that you have control over which direction it moves. The better you are at making payments on time, the longer you will go without having negative information added to your credit report. The older the negative information is, the less important it is to your credit score.
Aside from analyzing the types of debt you have, it’s also important to consider how credit utilization ratio impacts your credit score. Your credit utilization ratio is the amount of money that you currently owe divided by your credit limit. The lower your credit utilization ratio is, the better. Lenders and credit bureaus see this low number as an indication that you are doing a good job of managing your credit.
We know that you want to become a homeowner and are worried about how your credit history may impact your ability to obtain a loan. At IPS Amarillo, we can help you reach your goals of homeownership through our lease-to-purchase program. Your credit challenges are not a reason to let go of your dreams. Call today and learn what we can do for you.