Credit problems can seem like an insurmountable barrier to getting a home loan. It’s not an easy task, but you can turn things around.
1. Develop a budget. Stop all credit transactions first. Now you can manage your inflow and outflow of cash. Develop a flexible budget. Consider all necessary expenses. Then, eliminate expenses that can be trimmed. For more help, contact a nonprofit credit counseling agency, such as the CCCS at 800/308-2227.
2. Contact your creditors. If you aren’t making timely payments, don’t wait to be turned over to collectors. Your creditors may be able to help you get on a lower-interest payment plan or agree to a settlement.
Tip: If your balance is unmanageable, offer a 30% settlement first. Some creditors will take payments of 30%-40% rather than have you default. Get it in writing. When paid in full, send the settlement letter to the credit bureaus (Equifax, Trans Union, and Experian/TRW.)
3. Consolidate your debt. Another approach to acquire a debt consolidation loan. This type of loan will allow you to pay off your outstanding balances with one, lower-interest monthly payment.
4. Avoid bankruptcy if you can. A last resort is bankruptcy because of its long-lasting effects. Bankruptcy can make it difficult to attain future credit. It does, however, offer a new start. The primary types of personal bankruptcy are Chapter 13 and Chapter 7. Chapter 13 allows you to keep property but pay off a default amount during a three-to five-year period. Chapter 7 liquidates all of your assets that are not exempt. Property is turned over to creditors or sold by a court-appointed official.
New laws allow you to check your credit once a year for FREE.
Homes sellers are also homebuyers. If you are in the Austin, Texas area and are planing to sell and/or buy a house, contact me for a FREE home market analysis and marketing plan or help finding and purchasing your new home. Robin Scott, REALTOR® 512.589.7988 or robinscottrealtor@gmail.com
Austin, Texas. Robin Scott, BROKER. Certified Residential Specialist, Accredited Buyer's Representative, Seller's Representative Specialist. 512.589.7988.
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Buying or selling? Hire an experienced professional. Call Robin Scott, Broker at 512.589.7988.
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