If you’re looking to learn about credit scores, there are thousands of articles on the internet that will tell you about how credit scores are broken down, what they mean, and how to improve your score if yours is on the low side. While there are many helpful articles out there regarding credit scores, not all of them are helpful. Some may provide misinformation about what you can and cannot do when you have poor credit. While some things may be harder to accomplish with a poor credit score, nothing is impossible, especially if you know where to start. Here are some of the most common misconceptions about having poor credit you should be aware of.
Owning a Home
The decision to become a homeowner is likely going to be one of the biggest decisions you’ll ever make in your lifetime. Purchasing a home takes a lot of patience, back and forth with the bank, and laying out your entire personal financial situation for lenders to see. Many people with poor credit scores believe that the dream of homeownership isn’t attainable due to their score. However, that’s untrue. If you have a poor credit score you can still be a homeowner; you just may have to work a little harder with your lender to get to agreeable mortgage terms. There are even home loans available for people whose credit scores aren’t great to help them jump the hurdles into homeownership. Talk with your bank to see if there are any specialty loan programs available for people with lower scores. You may be pleasantly surprised.
Buying a Car
Another misconception about poor credit scores is that people believe they can’t purchase a vehicle. However, getting a car with bad credit isn’t as hard as you may think. There are dealerships who will work with people who have poor credit to help them build their credit scores while obtaining a vehicle loan. You may be able to get flexible terms on your vehicle, such as paying a lower monthly payment over a longer term, which makes purchasing a vehicle with poor credit easier.
Renting an Apartment
While it’s true that some landlords will require a credit check before they lease you an apartment, having poor credit cannot completely keep you from securing a place to live. Most landlords care more about the fact that you have a job with a steady income than they do about your credit score, so if you can prove to them that while your score may be low you have a solid, stable job, you should have no issues securing an apartment with a low credit score. You should be prepared, however, for the possibility of paying a higher deposit on your apartment, as some landlords may request this in exchange for allowing you to sign a lease with a lower credit score.
Getting Credit Cards
Credit card companies have gotten more lenient over the years about extending credit to people with low credit scores. Even though you may not have a desirable score, you should still be able to get a credit card with a poor score. You may end up paying more in interest each month, but the payoff is that you’ll have a credit card that you’ll be able to use should you ever need one in an emergency situation.
As with anything, education is key. The more educated you are about your credit score and the different options available to you, the better off you’ll be and the less likely you’ll be to run into issues because of your credit score. While you should always strive to improve your score to make borrowing easier, you should never feel discouraged or like it’s hopeless to live the life you want to live.