buying a house with bad creditSo you’re a financial rock star, and you’re ready to buy a home. You take pains to pay all your bills on time and you work hard to earn more and save more. Your credit score reflects your savvy money-management skills, and you’re proud of your 730 credit score. But your partner? Less so. Whether they had their credit information stolen, racked up student loan debt, or made some financial mistakes they’re currently working to correct, your love’s credit score is closer to 500 than 700. What do you do?

Before you give up on your dreams of owning some Nashville real estate, it’s important to consider all of your options.

Why is Your Partner’s Score Low?

Before you try to persuade a lender to approve you for a loan, ask why your partner’s credit score is less than stellar. If you can chalk a bad credit score up to a mountain of consumer debt, you both might need to take a step back. Buying a home isn’t a requirement — it’s an important decision — and trying to force the situation while one of you faces tough financial straits might not be the best idea.

If your partner has “bad” credit due to long-past transgressions, you could both benefit by taking action to improve their score before applying for a home loan. If you decide to put your home purchase on the back burner, work with your partner to improve their credit by developing a debt repayment plan. Start with these tips to boost a credit score (and score a better interest rate on that mortgage):

  • Check credit reports, look for mistakes, and correct errors if necessary.
  • Make all future payments on time and in full.
  • Keep your credit utilization ratio low (which means don’t run up a balance of $499 on a card with a $500 credit limit, even if you pay off that balance in full every month!).
  • Leave old accounts open but don’t use them.

Make the mortgage your own

Ready to buy a house now? It may make more sense to apply for a loan on your own instead of going in jointly with your partner. Keep in mind that mortgage lenders look at your entire financial picture to determine whether you qualify. That means your own income, assets, and creditworthiness need to meet the lender’s requirements without any help from other sources.

Before running down this road, ensure that the monthly payments and other costs associated with Nashville home ownership are ones you can shoulder on your income alone. While no one wants to think about worst-case scenarios, it’s your name on the dotted line — and you’re the one responsible for paying the mortgage if the two of you ever split up.


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