How can I get a mortgage if I have credit score under 400?

Question

Most of the mortgage companys I have tryed will not give me a mortgage because I have a credit score under 400. They say they will not help anyone with out having a credit score over 500.

I have a fourclouser on my credit and a really old credit card bill that I refuse to pay. Other then that every thing else on my credit report has been paid. Some late some on time.

I have tryed every mortgage company on line and the bank in my town.

I DO NOT want to get a credit card to 'fix' my credit history. I have had those and I do not do well with them. Or a store card either. Or a gas card.

I think things will stay on my credit report for up to ten years but I would like to know if there is a mortgage out there that will give me a mortgage now. Yes I have thought about rent.

Adam.. What is a a self certify, tracker based mortgage ?

ok OPEN:
Why jump all over me. I was just asking for help. I DO NOT THINK I KNOW IT ALL.

YES I have had a credit card and I have come to learn that I do NOT need one. I have a debit card Visa card and that is ALL i need.

How can I fix my credit with out findone someone to help me out. Things happen, I am NOT the only one that has gotten in this postion.

I want to respond to why I refuse to pay off the credit card that is on my credit report. I had a credit limit of 300$ It got up that high and I decided that I did not need it any more so I canceled it.

Come to find out a few months of 'paying' on it to pay it off the credit card co. was still charging 'finance fees' to it. after talking to them they informed me they could not completly cancel it untill it was at 0.

I told them the reason I canceled it was cause I could not affored it. To add charges to it would not help me pay it off.

I have spoke to other credit card co and have been told they can stop charging to it it they want.

The credit card bill has gone from 350$ to over 15 hundred dollars.

Pride or not I find this unprofessional and rude and that is why I refuse to pay it.

If they would agree I would pay the original 350$ if they would take off the rest of the 'Charges'

Answer 1

Hey Cathy,
It is true that you need at least a 500 FICO to get a mortgage. However, I hope that you understand the point of getting credit cards to improve your credit. I know it sounds like a catch-22 but it's the truth.

Your credit "score" is a score used for creditors to see the likelihood that the borrower will pay a debt back. The lower the score, the riskier it is for us as lender's to lend. The problem that I see here is that you only have one active tradeline (account) reporting on your credit, which is derogatory, since you refuse to pay it. How will your score improve if there is no way for us lender's to see that you've been making payments on time? Most lenders, in addition to a FICO over 500, need to see at least two active tradelines with a 12-24 month history that are PAID AS AGREED, meaning nothing derogatory.

As far as the foreclosure and the one credit card you have, they aren't going to go away any time soon. If you truly care about your ability to finance anything, including a home, you need to pay off this credit card you have, regardless of your pride.

The bottom line is this, if you continue the way you are going, things will not and cannot improve. They won't improve on their own, right? Credit cards can be dangerous, yes, only if you abuse them. If you use them to buy things that you would normally pay cash for, then pay off the balance at the end of the month, you will a) not pay any interest; and b) improve your credit, ultimately leading to a higher score and the ability to finance a home.

Answer 2

You can't get a mortgage with a score under 400. Check your credit report and see if there any collections that are older then 7 years old. If so, you can dispute them and possible have them removed from your credit which will help.
If you ever want to get a mortgage, you are going to have to have to rebuild your credit and prove to them that you will make your payments on time. Also, you will have to do this to improve your credit score. The lowest score a person can have is a 350. If you are under 400, then are very close to having the worse score possible. If you don't do well paying a $50.00 credit card bill, how are you going to be able to handle a $600. or $700. house payment every month?
You have a foreclosure and a credit card that you refuse to pay. You aren't willing to try to fix your credit. You have to prove that you are responsible and you haven't shown that in the past and aren't willing to show it now, so why do you think a lender would risk losing their money to give you a loan?
You will never be able to finance a house or anything else until you reestablish some new credit, by making your payments on time each and every month, not just sometimes. With your credit history, you are going to have to get one of those credit cards with a $300. limit.
It doesn't matter how long things stay on your credit, you still are going to have to build new credit to show that you are credit worthy. I have been processing "bad credit" mortgage loans for nine years and have only seen a score under 400 maybe three times. I don't mean this to be unkind, but that is pretty much the worse credit a person can have.You will probably have a hard time even renting an apartment at this point.

You can improve your credit, but you are going ot have to make the effort, otherwise, don't be angry if no one will give you a mortgage loan or any other kind of loan. Good luck.

Answer 3

For Finance and credit solutions I recommend this site where you can find all the solutions. http://personalfinancesolutions.info/index.html?src=HSB8vuv59WMr

RE :How can I get a mortgage if I have credit score under 400?
Most of the mortgage companys I have tryed will not give me a mortgage because I have a credit score under 400. They say they will not help anyone with out having a credit score over 500.

I have a fourclouser on my credit and a really old credit card bill that I refuse to pay. Other then that every thing else on my credit report has been paid. Some late some on time.

I have tryed every mortgage company on line and the bank in my town.

I DO NOT want to get a credit card to 'fix' my credit history. I have had those and I do not do well with them. Or a store card either. Or a gas card.

I think things will stay on my credit report for up to ten years but I would like to know if there is a mortgage out there that will give me a mortgage now. Yes I have thought about rent.
Update: Adam.. What is a a self certify, tracker based mortgage ?
Update 2: ok OPEN:
Why jump all over me. I was just asking for help. I DO NOT THINK I KNOW IT ALL.

YES I have had a credit card and I have come to learn that I do NOT need one. I have a debit card Visa card and that is ALL i need.

How can I fix my credit with out findone someone to help me out. Things happen, I am NOT the only one that has gotten in this postion.
Update 3: I want to respond to why I refuse to pay off the credit card that is on my credit report. I had a credit limit of 300$ It got up that high and I decided that I did not need it any more so I canceled it.

Come to find out a few months of 'paying' on it to pay it off the credit card co. was still charging 'finance fees' to it. after talking to them they informed me they could not completly cancel it untill it was at 0.

I told them the reason I canceled it was cause I could not affored it. To add charges to it would not help me pay it off.

I have spoke to other credit card co and have been told they can stop charging to it it they want.

The credit card bill has gone from 350$ to over 15 hundred dollars.

Pride or not I find this unprofessional and rude and that is why I refuse to pay it.

If they would agree I would pay the original 350$ if they would take off the rest of the 'Charges'
Follow 8 answers

Answer 4

A credit score of 400 is absolutely awful. It's below the level that lenders think is a risk, it's at the level they are sure you aren't going to pay them back.

With a score of about 650, you could get a mortgage at around 6%. On a loan of just 100,000, that'll cost you $6,000 per year. With a score of 400, if you can get a loan at all, it'll probably be at 11% or more. That same loan would cost you $11,000 per year.

Maybe you think that's insignificant. How about the fact that if you qualify for up to $100,000 at 400, you'd probably qualify for $250,000 with a 650 score, because the same payment buys a lot more at lower interest. Understand how much more house you get for $250k versus $100k?

You're making some really bad choices, and not listening to credit advice is perpetuating your condition. There are some smart credit counselors out there that can help you, but you come across as a know it all.

Get this and get it soon: Most people who are poor don't do what they do because they are poor, they are poor because they do the things they do.

You'd better learn how to handle a credit card. If you can't do that, you probably can't handle a mortgage, either, and that's what lenders see on your report, and that's why most won't lend to you at all, and the ones that will are going to rip your head off on interest.

You can do that if you want to, but face the fact that it's YOUR choices that are doing it. No one owes you a loan, they want to be sure they are going to get their money back, and a credit score of 400 tells them that they'd be better off planting their money in the dirt and hoping it starts to grow on a bush than hoping you'll pay them back.

edit: Okay, I jumped all over you. Now, the fact is that getting a credit card and handling it responsibly is how you fix your credit. You don't want to do that. Fixing your credit is how you get a mortgage. You don't want to face that. You've tried a lot of lenders and no one wants to give you a mortgage. You want someone to alter your reality without you doing what it takes to change it.

Or did I miss something?

Answer 5

The irony of your question is "I don't want credit, but want to improve my credit score."

Time is the most important element in raising your score, but if you don't establish any new credit.....there is no "positive" activity occurring to your credit.

The most recent 24 months is the most important, but since you have a foreclosure, your credit will be more scrutinized, because on paper you haven't demonstrated ANY improvements in your financial habits.

The most straightforward resolution is to obtain a credit card - keep the available credit as low as possible like $300 - and pay it off in full every month.

Answer 6

Put at least 30% down and talk with an Equity Lender who doesn't care about credit.

Answer 7

1 - a good deposit 10 - 20%
2 - a self certify, tracker based mortgage

Answer 8

This is puzzling to me too

Answer 9

I think it depends