I’ve been noticing a credit trend recently. Young homebuyers who saw their parents struggle during the recession about 10 years ago are choosing to stay away from credit. They pay cash for most everything for fear of finding themselves in the same scary financial situation.
And then they try to buy a house. Obtaining credit can be a challenge if you have none to begin with. But here’s the good news: no credit is better than bad credit!
Do you have the same circumstance? Here are a few quick ways we suggest for people to establish credit:
1- A Fingerhut credit card – you put money in an account and you can charge up to that amount, www.fingerhut.com
2- Seacoast Bank has a program where you borrow money, say $1000, and put it in a CD. You make payments on it until the loan is paid off and at the end you have a $1000 CD investment! Inquire at Seacoast, 352-483-8900.
3- Secured credit card – most banks offer this, where you put money in an account which is the collateral for the credit card. Start with your local bank.
If someone with no credit were to do the 3 things above, they could very well qualify for a mortgage in about 6 months.
Do you have any other mortgage questions? We would love to hear from you!