Credit Challenges

Do you have credit problems but really want to buy a house?  Well of course you want to buy a house!  Why pay off your landlord's mortgage when you could be spending your hard earned cash paying off your own mortgage?  If you're paying $1,500 a month in rent, in five years you'll have paid $90,000 to your landlord.  That's a lot of change that could be going to pay off your own house!

Monthly Rent Added Up Over Time
Rent	Year 1	Year 5	Year 15
$1,000	$12,000	$60,000	$180,000
$1,500	$18,000	$90,000	$270,000
$2,000	$24,000	$120,000	$360,000
$2,500	$30,000	$150,000	$450,000

So let's get that credit fixed up and get you on the road to home ownership!  To begin with, stop making the problem worse.  Don't spend what you can't afford.  Don't go to Pottery Barn and put another $400 on the credit card.  You don't need those pillows and another set of holiday dishes anyway!  Better yet, put yourself on an allowance.  Give yourself your spending cash at the beginning of the month and once it's gone, it's gone.  Don't put more on the credit card. 

Next, start working those payments down.  Make paying off your debts a priority!  Take a good hard look at what you owe, how much, to whom and what the interest is on each one.  This is a perfect time to make a budget and figure out how much you can pay to each one and how long it'll take to get it paid off. 

Close those extra credit cards that you don't need.  Having a bunch of credit cards just brings your credit score down!  Having a couple cards with a low balance (that you pay off each month), builds your credit.  Having a bazillion cards, even without much on them, hurts your credit.

Talk to someone!  If you've got a credit problem, talk to the companies that you owe and see if you can work out a better payment plan.  Talk to a loan officer and see what you need to do to get a loan.  Give me a call.  I'd be happy to get you in touch with a lender and get you on the right track.

Make a plan.  Things are always easier if you have a plan.  If you're fumbling around in the dark, not sure what your credit is, not sure how to fix the problem, you're never going to get any closer to getting a house.  Even if the news is bad, it's always better to understand the problem and be working towards a way out.  You've got this!