Tips To Get A Home Loan With Bad Credit Without A Co-Signer
This is a sponsored conversation. All opinions are my own.
One of the most daunting tasks for today's "millennials" is trying to get a loan. Whatever life throws your way, sometimes it's a house, or a baby is on the way, or even there is an emergency like medical bills or a car accident. There are a lot of different reasons why someone might need a loan and finding out what can work for your family without a co-signer can be in your future. Here are some tips to help.
One of the most daunting tasks for today's "millennials" is trying to get a loan. Whatever life throws your way, sometimes it's a house, or a baby is on the way, or even there is an emergency like medical bills or a car accident. There are a lot of different reasons why someone might need a loan and finding out what can work for your family without a co-signer can be in your future. Here are some tips to help.
Figure Out Your Credit Score
When you’re applying for a loan, your credit score will play a huge role in determining whether you are approved or not. If you don’t know your FICO score, there are plenty of ways you can find it: check your credit score for free using Experian’s FreeCreditReport.com, ask your bank if they provide free credit scores, or request one directly from FICO (but they'll charge you).
Find Ways to Build Your Credit Score
The truth is, bad credit can mean that you’re going to have to pay more for a loan. But there are things that you can do to improve your score. And honestly, the best thing you can do is build it up before taking out a loan.
Compensating for Bad Credit
As a rule, you are more likely to secure a home bad credit loan even if you can help compensate in other ways. Raising funds for a substantial down payment, for example, can help offset your level of risk to lenders, even with bad credit. Additionally, keeping your debt-to-income ratio as low as possible is an important factor that lenders will note when granting approval.
Choose a Secured Loan
Secured loans are a good way for borrowers with bad credit to boost their appeal when applying for a loan. With a secured loan, a borrower offers an asset as collateral. It makes lenders more likely to approve a loan because they know they can take possession of the asset to cover their losses if the loan is not repaid. Just make sure you avoid short-term, high-interest title loans! They are definitely not worth the risk.
Join a Credit Union
Credit unions are a good option for borrowers with bad credit. They’re like banks, but when you apply for a loan, they don’t evaluate you purely on your credit score. The key is that you have to be a member, so you have to convince them to grant you membership. They look at your financial health, but they also make a decision based on factors like where you live, where you work, or where you went to school. Sometimes jobs offer credit unions, so this may be an option for you.
My husband and I have had our ups and downs. We were able to secure a loan for a car even though money was low, our credit wasn't great, and I didn't have a job because he was able to get one through his job. There are options out there. Do your research, take your time, and create a game plan. And ask for help if you need it.
