Posted on: 02nd Apr, 2011 01:48 pm
our home is paid off. it is worth 175000. we only have a 500 credit score and want to get a home equity loan to pay off bills and build our credit back up. can you help? we live in georgia.
Hi dww,
With a credit score of 500, you won't be able to qualify for any kind of loan. You'll have to take steps in order to improve your credit score. You should have a credit score of around 580 - 600 in order to get a FHA loan.
Thanks
With a credit score of 500, you won't be able to qualify for any kind of loan. You'll have to take steps in order to improve your credit score. You should have a credit score of around 580 - 600 in order to get a FHA loan.
Thanks
There are still sub-prime lenders in existence. A 500 score is definitely sub-prime. Ask around and you'll probably find someone willing to take a flyer on your needs. You'll pay a premium on the interest rate, but if you truly need to borrow, the cost won't make that much difference, as long as you can pay it.
this is something i would be cautious of if i were you. there are a lot of hard money lenders out there preying on people in your exact situation.
if your credit is low due to past derogatory accounts, paying them off may not do as much as you think. if you have a lot of collections they could be outside their statute of limitations. some accounts could be reporting twice.
the first thing i think about when i hear a 500 credit score is that you were granted credit before and something went majorly wrong. no big deal, life happens and we deal with it. for your information 79% of credit reports have misinformation on them. 1 out of 4 have errors so serious it results in denial of credit.
the best thing you could do for yourself, if you can wait a few months, is dispute these items. this could result in a much higher credit score, you not paying money you're not obligated to pay, saving thousands of dollars in interest on a loan, and last but definitely not least - keeping your home safe.
it also sounds like you need to establish some positive payment history. otherwise here's what's likely to happen...
- you have to go through a hard money lender who will have very high rates and if you miss a payment, can foreclose on you immediately.
- you pay these items off and find that your credit score did not increase much resulting in you not being able to refinance out of that high interest private loan which probably has a balloon payment that i'm guessing you're not able to pay all at once.
- by some grace of god you win the lottery and it doesn't matter anymore.
that's my advice to you. dispute first and try to raise your credit score to get traditional financing. or buy a lottery ticket and keep your fingers crossed.
if your credit is low due to past derogatory accounts, paying them off may not do as much as you think. if you have a lot of collections they could be outside their statute of limitations. some accounts could be reporting twice.
the first thing i think about when i hear a 500 credit score is that you were granted credit before and something went majorly wrong. no big deal, life happens and we deal with it. for your information 79% of credit reports have misinformation on them. 1 out of 4 have errors so serious it results in denial of credit.
the best thing you could do for yourself, if you can wait a few months, is dispute these items. this could result in a much higher credit score, you not paying money you're not obligated to pay, saving thousands of dollars in interest on a loan, and last but definitely not least - keeping your home safe.
it also sounds like you need to establish some positive payment history. otherwise here's what's likely to happen...
- you have to go through a hard money lender who will have very high rates and if you miss a payment, can foreclose on you immediately.
- you pay these items off and find that your credit score did not increase much resulting in you not being able to refinance out of that high interest private loan which probably has a balloon payment that i'm guessing you're not able to pay all at once.
- by some grace of god you win the lottery and it doesn't matter anymore.
that's my advice to you. dispute first and try to raise your credit score to get traditional financing. or buy a lottery ticket and keep your fingers crossed.
I think that you can get a loan. there are lenders who give loan with some terms and conditions. Better contact some local lenders.