If we go thru a credit debt consolidation(CARE ONE) would it lower our chances of getting a home?
Question:
Answer:
Most debt consolidations firms don't do anything you can't do for yourself. Most have outrage fees and you could do it yourself. A lot of debt consolidations appears as bankruptcies on your credit report.
Before signing on with any debt consolidation company I suggest you check out Dave Ramsey. Read his book The Total Money Makeover and check out his website. His book and website will teach you how to budget, how to deal with creditors, how to pay off debt, how to save for emergencies and use cash for every day purchases, how to save for retirement, etc.
You can do this without the company, just read and educate yourself on the process. You will change your behavior and be better off for it! You can do it!
It depends. Clean up your credit before even looking.
Now, this "may" be off base - my experience as a loan officer is more than ten years out of date - and I am not familiar with "Care One". However, recent promotional materials I've seen, and personal experience from the past, indicate the answer is a qualified "no".
Just be sure your debit consolidation firm checks out - there are SO many scam outfits out there who will not only NOT help you, but will totally destroy your credit.
As for getting help, as a loan officer I would have more confidence in a person who recognized they were having financial trouble and sought help than someone whose credit history shows a trend toward denial and evasion. And it is against the law to discriminate against anyone who has exercised their legal rights under credit protection laws.
HOWEVER, your FICO credit score "seems to be" the guiding light these days - It would seem that few credit grantors make their own decisions any more - they would rather take the lazy way out and simply rely on FICO. You can find any number of helps on understanding how to clean up your credit and improve your score. Visit the websites of the three credit reporting agencies for some free help. (http://www.transunion.com, http://www.experian.com/, and http://www.equifax.com/home/)
You should pay the few bucks to pull your credit score and - in many states - you are entitled to a once a year free copy of your credit reports from each bureau (which may or may NOT include your FICO score) - which will likely be different from each.
Also, there is a Federal "bill" in the works to make it a national 'right'. But the cost to BUY your reports is nominal anyway, and you can even get all three from one source for something on the order of $45 or so (last time I did it). (This is NOT an endorsement, but Equifax is one that offers this service - The other's "may" ) GET THEM, then clean up any errors on your three main credit reports - then establish a record of responsible credit management for as long as you can hold back from buying a house - the higher your score, the better your odds of getting a decent loan for a home and the lower the interest rate may be that you have to pay. Alternatively, consider a "rent to own" or a "lease option" home - where you rent the house and build your credit reputation - this is also a good way to ensure you are going to be happy with your new home. By the time you are ready and able to buy, you will know the neighborhood (do trains or trucks wake you in the night? Are there gangs running the area? etc.) and you will also know if the house is adequate and acceptable (Does the roof leak? Are there infestations of insects or rodents that come back after treatment? Does cold weather result in wild life [mice, squirrels, skunks, snakes, etc.] invading your home?)
More Related Questions & Answers...