First time home buyers with a low credit score can purchase a home. However, it depends on how low the score is. FHA guidelines for first time home buyers allow a credit score as low as 580 with a 3.5% down payment. For those with a lower score the guidelines call for a 10% down payment.
However, even though the FHA has these guidelines lenders don’t typically follow them. They require as high as a 640 credit score to get the 3.5% down payment. The reason lenders require a higher down payment is that the FHA penalizes them for too many bad loans. Therefore lenders are protecting their ability to offer FHA programs long term.
First Time Home Buyers Low Credit Score – Reasons
There’s more than one reason why someone may have a less than 580 credit score. Younger people simply may not have established enough positive credit. They have clean credit report but not enough on the credit report. This person would be wise to use an FHA loan to purchase a home if they have the income.
Some people that have a sub 580 credit score have a lot of negative items. They may have just fallen on bad times in the past. This person should go through the process of repairing their credit. This would increase their score and lower the interest rate on the loan.
However, there is a category of people that need to budget themselves first. Diving into a $200,000, give or take, mortgage when they are struggling to pay bills now is not a good move. They need to stabilize their financial situation before taking on further debt. This is true even if their mortgage payment is less than their rent payment. If you don’t pay your mortgage you can lose your home.
If you fall into any of these 3 categories we can help. We have services to help people build credit, remove negative items from their credit report, and budget themselves and otherwise stabilize their finances.
As of the writing of this post the real estate market is as hot as it’s been since 2007. Many consumers are looking to purchase a home soon because they anticipate that prices will continue to go up. However, many that want to buy a home cannot qualify mainly due to credit score. The most important factor in learning about how to qualify for a mortgage is a credit score.
This issue not only affects the prospective buyer, but also the real estate or mortgage professional that is assisting them. Most people in these industries realize that the first thing they must do is ascertain if the prospect can qualify. In most cases, if they cannot, it’s due to a credit score issue or other issue involving their credit report.
Working with Real Estate & Mortgage Professionals
Many real estate and mortgage professionals have realized that spending their time to advise a person how to clean up their credit report is time consuming. And, a lot of time it doesn’t lead to a closed escrow because their client doesn’t follow through on their own.
That’s where we come in. We do nothing but help consumers increase their credit score. And, we have several ways of doing it. Although credit repair is a great step, it is not the only step to be taken. By referring their credit challenged clients to us real estate and mortgage professionals can continue to work on their low hanging fruit, those buyers that can qualify right away. They don’t have to teach their prospect how to qualify for a mortgage.
We work with their credit challenged client and keep the real estate agent or mortgage broker informed of their clients progress. When we do get a client to that 640 score, or the score needed to qualify, we remove any remaining disputes to avoid any issue in underwriting.
We’ve been doing this since 2004, have an A+ BBB rating and are certified by the National Association of Credit Services Organizations (NACSO). We work in all 50 states and currently work with some of the biggest names in the real estate, mortgage and banking industries.
If you want to learn how to start a credit repair business you first have to ask yourself some questions.
How many hours per week or per month do I have to devote to a credit repair business?
Do I have the necessary expertise in technology, sales, marketing, and customer service?
When I start my credit repair business do I want to do all the work myself?
Do I want to do it the hard way or the easy way?
I’m not trying to dampen your spirits about learning how to start a credit repair business. I’m trying to save you a lot of time, energy and money. The reason I am qualified to do this is only because I started a credit repair business in August of 2012 and become very successful with it. If I can pass along what I’ve learned to you then taking the time to write this is well worth it to me.
I get calls from many people every week asking me about this topic. The fact is that we don’t know what we don’t know. Then we read on the internet how easy it is and how much money we can make. It’s therefore, very enticing to learn how to start a credit repair business.
What They Don’t Tell You
What they don’t tell you is that if you have to do all the marketing, selling and service delivery yourself, you’ll never have enough business to make a substantial income. The reason is that there just isn’t enough hours in a day. The solution is to have other people representing you that are independent and not employees.
I’m sure you’ve figured this out by now but here’s what you need:
Credit repair law training and how to build a business in this industry
Knowledge of the federal laws and laws in your state
Knowledge of the competition both locally and nationally
Technology to build online reporting for your client
A website to market your business
Knowledge of how to market a credit repair business
Software is NOT All That You Need
Many companies that want to sell you their software may tell you that you don’t need any of this. Or, that it’s simple to learn. It’s not.
After nearly 7 years in the industry I would suggest that you align yourself with a company that’s already done all of this and simply represent them as an Independent Agent. Get your business started now by using what someone else has already built. Be successful with it. If at some point you’re still dead set on starting your own separate company, at least then you’ll know not only what is necessary, but how to do it.
Your Options for How to Start a Credit Repair Business
There are a few companies out there that give you the opportunity to align with them and still have your own business. Credit Repair USA and Allied Credit Solutions are two of them. However, there is only one company that I’ve found that gives you everything you need to be in the credit repair business. They also give you the opportunity to bring on other people and you’ll get paid on their production. Why is that important? Because you can only do so much yourself. Just like all successful business people you want to use leverage.
This means you can be in business tomorrow and avoid the overwhelming time, cost and information you’ll have to learn about how to start a credit repair business.
Click below to find out more. Here you’ll find a powerful and informative video. This 30 minute video will give you all the details of a great opportunity in credit repair. You’ll learn how to start a credit repair business today. And, do it for less than $300! It’s exactly what I did in 2012. Since then I produce nearly $1 million in annual revenues from my credit repair business. And, I have no employees. I have no liability. My overhead is very low. I work from home. And, I control my own schedule.
Want to know more? Click below to watch that 30 minute video. Then you can book a phone appointment to speak with me. You’ll get all your questions answered. And, we can talk about what you’re looking to accomplish a credit repair business. How is it done? What do you do every day to earn 6 figures? And why this business model will help you do that.