• 66°
franklin county times

Overcoming bad credit barriers

There are many barriers to buying a home – and overcoming past bad credit is one of them for many individuals. Don’t lose hope; there are steps you can take to help with the challenges of securing a loan and working toward rebuilding your credit.

Can you get a mortgage loan if you have “bad credit”? Many times, the answer is yes – but you will have some tradeoffs.

The thing about bad credit is, no two people are the same; there are many varying factors. Securing a loan might depend on how much you have for a down payment, what your debt load looks like, your income and whether you have any debts that are in collections.

You will likely also pay a higher rate than a conventional mortgage. The lender you use will play a factor because all lenders have different requirements. Be prepared for a higher monthly payment because of the higher interest rate, but continually working to get your credit in shape will allow you to refinance at better terms later on. Do your research on loan options to see what type of loan will work best for you.

You might even choose to hold off buying until you have a chance to repair your credit.

How do you rebuild your credit? Begin by working on your credit score and credit standing. Nobody likes to hear this because it takes time and patience, but raising your score and improving your financial situation will give you better loan options.

Pay attention to your:

• Payment history – Paying your bills on time is essential because your history can account for 35 percent of your score. Make this a top priority!

• Available credit – The amount of your available credit that you are using matters. Work to start applying extra payments to debts to begin working those balances down sooner. Having fewer or reduced monthly debt payments helps your debt-to-income ratio.

• Income – Getting a second job or asking for that raise might be necessary if you want to speed up what you are able to pay off. Bonus: The extra income also helps your DTI ratio. Further, having at least a two-year job history is important for loan qualification.

Waiting it out is definitely the most challenging part. Necessary changes to your credit score will not happen overnight. Setting small, incremental goals will help keep you on track and help you see your progress.

Enjoy those small victories. Every bit of progress is getting you closer to your goals!

____________________________________

Emily Mays is vice president/chief administrative officer at Community Spirit Bank in Red Bay, working in finance for 15 years. She is an enthusiastic social media marketer, financial literacy advocate and go-local supporter.

News

Expect closures for U.S. 43 at Walmart 

Franklin County

RCS, FCS offer seamless summer meal programs

Belgreen

Belgreen FFCLA hosts basketball tournament to help hunger

Franklin County

Phi Theta Kappa inducts honorees from Franklin County at NEMCC

Belgreen

Congratulations to the Class of 2023!

News

PHOTOS: West Elementary enjoys color run

Lifestyles

Strawberry farm offers u-pick fun

News

PHOTOS: RHS Class of 2023 seniors graduate

Belgreen

PHOTOS: Tharptown, Phil Campbell, Belgreen, Vina, Red Bay seniors graduate

Franklin County

Charles Parrish: Superintendent’s love for school system sees stadium named in his honor

High School Sports

Kiel helps obtain funds for TES bleachers 

News

Area residents among those on ICC honors lists

Franklin County

FC chooses new assistant county engineer 

News

Red Bay’s Weatherford Library gears up for summer reading program

News

NW-SCC students to showcase their art at Tennessee Valley Museum of Art

Franklin County

Tharptown High School rocketry team blasts into second place in nation

News

Vina High School holds Spring Spectacular 

News

RES fifth grade chorus presents “RES Goes Country” 

News

Addie’s Flip Tip and Tap holds 18th annual dance recital

Franklin County

Chucky Mullins: Football legend makes lasting impact

Franklin County

ACA awards foundation scholarship

Franklin County

FCS provides Seamless Summer meal programs

Franklin County

Commission announces voting location changes

News

RPL gears up for summer reading program, other events

x