BAD CREDIT

Michael Holigan: If you're like many people you've probably experienced some lean times. And for many this means some bad credit. But black marks in your financial past don't mean that you can't own your own home. Florence Buturo knows all about bad credit. She had trouble repaying some student loans and credit card bills, but she was determined to buy a home.

If you're like Florence, the first step is to get your credit report from the three national credit bureaus. You many find someone else's bad credit listed on your report. If you do, that takes about one month to fix. If the credit problems are yours, you need to find a mortgage lender that's willing to work with you.

Florence: I just started shopping around for a mortgagor who could probably look at my credit situation and approve me.

MH: If you're paying your bills on time now, there are certain lenders that will look for a way to get you a mortgage.

Sandra Thomas: Credit is really looked on very seriously, particularly bad credit. Only because we're looking at a repayment of what's typically your largest debt.

MH: So lenders take all the pros and cons into consideration and compute the odds you'll pay them back. They need to know why you got into trouble. Was it due to illness or loss of job or just financial irresponsibility. Most lenders understand that if you're ill or lose your job you can't pay all of your bills on time. Florence found a lender that gave her the go-ahead.

Florence: And they went through my credit. They said, "Oh, no problem. We've seen worse situations."

MH: Florence's financial history is not without consequences. She's paying a higher interest rate now, but plans to refinance after establishing a better credit record. In the meantime, she has her own house and is building equity for herself. A recent study shows that 85% of the people that think they don't qualify for a home actually do. Don't disqualify yourself.

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Episode 49 1997 - 98 Season

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