Hello, everyone and welcome back to a new video sean's, a name and credits the game. Today, now we haven't made a video on credit in a while, and i figured why do most people want to get their credit score up? Well, typically, it's to buy something big. Like a home, so today i'm going over my three best tips on how you can buy a home with bad credit and spoiler alert. It's actually much more attainable than you think.

So, let's do it! Okay! Now i get this question all the time sean. What is the lowest my credit score can be to qualify for a loan, and my answer: well, one you shouldn't be asking that question. You should be asking how you improve your credit score and then two you should hit the like button on this video. I'm dead serious, like do it right now: click it now, but technically the lowest.

Your credit score can be to purchase a home in the united states is 500.. Now no lender ever advertises. The fact that you can take your score all the way down to 500 and still qualify for a home loan, because if you have a 500 credit score, you have to be making tons of money and have tons of money saved up in the bank, which most People with bad credit do not have lots of money saved up and lots of income coming in, so most lenders say the minimum. The credit score can be is a 580., but before i go over my three tips on how you buy a home with bad credit, it's really important that you understand what gets factored into you qualifying for a home loan, because credit is just one of the three Pillars now i want to break this down visually for you, so you can actually get a good understanding of how this works.

You need credit income and assets all right. So, let's just say, for example, purposes, and this again is an example. This is not how it works when a lender looks at your file, but let's just say for example, purposes: you need 10 points to qualify for a home loan and you can earn points in each one of the three categories. Let's say your credit is bad and you have a 580 credit score, so we'll rank that like a two out of ten points.

Okay, now, if you don't make much money or you make a lot of money, but you also have a high car payment or like high debt in general, your income on paper won't look great either. So, let's just rank you a three out of ten there. Then, if you also don't have much money saved up our assets won't look great, so we'll rank that a 2 out of 10 as well. That means we're at a 7 out of 10 and we cannot qualify for a home loan.

I'm gon na say this one more time. This is not how lenders take the strength of your file, there's way more algorithms and ratios and things we have to do on the back end to make sure you can qualify for a home loan, but this is just broken down in the simplest way possible. But now, let's revisit the board with a different scenario, so let's say your credit's, so bad at 580 right, however, this time you make pretty good money and have pretty little debt well now, you're, looking good at like a six in that category, even if you have Very little down, you can still qualify for a home because your file is much stronger right because your income is able to carry the weight of the other pillars again. This is the simplest form, but this is what makes up the strength of a loan.

So if you had phenomenal credit but lacked in the assets and the income pillars, your chance of qualifying for home is still good now, obviously, a lot of people are going to watch this and go well sean. Where do i stand? What's good? What's bad? Which kind of ranking would i fall in for each pillar and it's impossible to tell you kind of upfront or kind of blanket information on that, because every situation is completely different than the next? So you really have to talk with a mortgage lender and they'll kind of let you know hey. These are your strengths. These are your weaknesses, here's what we need to do, or at least the good lenders like myself will tell you that some other lenders will just tell you to get lost.

What i'm trying to get at is, if you have low credit, we can make up for it in other aspects of your file and if we can't make up for it with other aspects of your file, then we need to improve your credit, so we can get Some points and different pillars here and there we cannot have you lacking in all three pillars, because the homeownership dream will not happen that way. But, okay, now that you know the three pillars and kind of have a very rough idea of what goes into actually factoring. If you can qualify for a home loan or not, let's get into my three tips on what you can do. If you have bad credit to expedite the process of buying your home tip number one, i highly recommend opening a credit builder savings account.

This is going to allow you to build your credit, while you're also building your savings. I call it a twofer. You get a two for one on this one. You get to build strength in two of the pillars for doing one thing now: there's tons of different credit building savings accounts and options out there, but the one that i found to be the most effective, which is most important and the cheapest, is actually going to Be credit, strong and i'll actually leave a link in the description for you, but credit.

Strong is probably the best option out there. I've seen a bunch of others and they might be cheaper, they might be more expensive, but credit strong is the most effective again i'll. Leave a link down below for you to learn more information on it, but basically this is how it works all right. You open your account and they instantly give you a loan.

Now i put loan in air quotes because essentially it's just a loan, so you can actually build credit, so it shows up on your credit report, but it's basically a loan that you're giving yourself and it's an account. That's fdic insured, like a savings account. It's just called a loan, so you can build some credit history. It forces you to make small monthly payments every month into this account.

The important part is it forces you you literally have to and don't think you have to be dropping like hundreds of dollars. Every month into this account, no, no, you can set up a plan where you're, like saving 20 bucks a month 50 bucks a month, something small just to keep you on track for your goal, and you could also pick like a specific plan. You know for how much you want to save whether it's a thousand 2500 or more, and once you save that money with this account, you get the money transferred back to you and it's shown as a loan was paid off on your credit report. So you build some credit history and you get your money in your account so, like i said, you're getting a two for one you're being forced to save money and you're being forced to build your credit, so you're building strengths in two of the pillars for doing Just one thing, but let's like take a step back and think about this for a second.

If you came to me and said sean, i really want to qualify for a home loan. What do i need to do and i said, hey look, you need to save three thousand dollars and you need to get your credit score up. 25 points. You might think yeah, that's great! All right! I'm gon na hit the ground running and you're gon na be like saving like crazy working on your credit and then all of a sudden life's just gon na smack you in the face and you're gon na fall off your goals.

It's normal. It happens we're humans, life is crazy. You can't predict what's going to happen tomorrow, but a credit builder savings account does not allow you to fall off your goals. If you set a goal to save a thousand or twenty five hundred dollars, you have to reach that goal because, for example, if you set a goal to save twenty five hundred dollars - and you only saved up fifteen hundred before life smacks you in the face, you Might think, oh, you know what i'm not gon na be able to make this happen.

I'm gon na just take my money. No, no! You cannot take your money. You cannot get your money out until you have completed your goal so, like i said it forces you to reach that goal and save that money and again build that credit. I think it's pretty cool and it'll keep you on track into buying a home.

That's probably the biggest tip. I tell all the clients that come to me who really want to qualify for a home loan but anywho. Let's get into tip number two. I've talked about this before, but get yourself set up on a rental reporting service.

If you've been paying rent on time for the last year or two years, a rental reporting service, like rock the score which i will leave linked down below, because that's my favorite one. But if you use a service like this, you could pull in. So much great credit history to boost your score in 30 days. What's your highest expense every single month, i bet it's your rent.

Well, if you could add your rent to your credit report and have all this on-time payment history for a very expensive payment, you're gon na improve your credit score tremendously, depending on your credit profile. It can get you up like 20 to 50 points within a month, which is incredible, and i tell all my clients to do it and that's how we get them into homes. Asap it's totally worth doing again, i'll leave a link to rock the score down below. I like them, because you can actually pull in the last 24 months of history and you don't have to kind of get signed up and then wait two years to get that history.

They can pull it all in for you, which is why i highly recommend them link down below, but not sure. If you have noticed a trend so far, but tip number one is for those who are just getting started and for those who are much weaker on the three pillars, then tip number two is for those who are a little bit ahead and maybe they've started in Thinking about the process and then my tip number three is kind of like hey, you think you're ready to go and - and we want to get in this home asap. So what do i recommend? Well, i recommend just getting an fha loan again. This is when you're kind of right on the cusp - maybe your credit is okay to bad.

Your income is okay to bad and your assets are okay to bad. This is when you really want to talk to a lender, to see if you're ready to qualify for an fha loan and real quick. Some people might not know what an fha loan is. That's, okay, i'll give you the quick and dirty synopsis.

An fha loan is basically a government-backed loan that allows much more leeway when it comes to credit, income and assets, and typically, if you have lower credit, you'll want to go with an fha loan anyway, because you're going to have a lower monthly payment than that of A standard conventional loan: these are great options for individuals with less than perfect or bad credit, and i do a lot of fha loans. I love them and that's the one two knockouts. Let's recap step number one. You really want to talk to a lender to see where you fall and what strengths and weaknesses you have in regards to the three pillars.

So are you close? Are you ways out what's the status and once you talk to a lender and figure out which strengths and which weaknesses you have in regards to the three pillars, you can kind of use these tips to expedite the process of buying a home and i've seen thousands Of situations and talked with thousands of people on how we can get them to qualify for a home loan and i'll say, there's really two pillars that are in your control. You got assets and you got credit and you can't really go to your employer and be like hey, i'm trying to buy a home. Can you give me a raise because they're just gon na laugh in your face, so focus on the things you can actually control, which is going to be your credit and how much money you have saved up get yourself a credit builder savings account start reporting. Your rent on your credit report and get yourself an fha loan to ultimately buy yourself, your first home with bad credit.

That is the quickest way possible to expedite this process. Unless someone else bought you the home for you or you had a co-signer, there is no quicker way to make it happen than what i've discussed in this video trust me. I do this all day every day, 24. 7..

Okay, credit is a fickle beast. That can be very, very frustrating and is very hard to change overnight. So don't get discouraged, because if you do these things again, you're going to expedite the process a ton and no one really teaches you about credit. So i've actually made a video playlist down below where i've got tons of videos that talks about credit and how you can use it effectively.

So you can buy yourself a home that video playlist will probably save you. Thousands of dollars in interest payments on loans and credit cards and pretty much anything in the course of your lifetime. So i highly recommend you educate yourself on the process of credit because you're going to be so much better off. I promise you, but i don't want you to get discouraged because even with bad credit, home ownership can be attainable and i highly recommend you talk to a lender like myself.

If you want to learn more about me and my mortgage business, you can check out lending.shawnmacley.com i'll leave it linked down below, but ultimately i hope you enjoyed the video if you did. Please hit that like button. Please subscribe for more content and please share this video with a friend who might be in a similar situation to you. I'm always releasing really great content.

So again, i'm gon na tell you one more time make sure you subscribe. So you can check out next week's video and i'll see you. Then you.