Your Questions About Home Loans For Bad Credit

Donna asks…

Does bad credit in the United States affect me in australia?

I will be relocating to the region soon. But I wonder would my bad US credit transfer to Australia. I plan on opening a account with Westpac and apply for a home loan when I arrive.

Thank for any help on this!!

John answers:

Not unless you ask them to check your U.S. Credit…

But remember that you are brand new to Australia and whatever credit system they use – you don’t have a record with them and will have to start all over establishing credit in a new country.

Been there… Done that… Wasn’t easy and thank god my credit in my old country was good and they actually went thru the trouble to check it when I first applied for credit in the U.S.

Susan asks…

where can i find a 100% home purchase loan for under 70,000 with bad credit?

we need a home purchase loan with 100% financing for the amount of 63,000 with bad credit. can anyone tell me where to make our wish of owning our own home possible? we know if its gods will someone will help us. thank you and god bless. you may contact us via email at

John answers:

Mandy asks…

Where can I get a home loan with terrible credit?

I am in Georgia and I am looking to buy my first home. I have really bad credit, and no money to put down. Is there any place out there that can help me?

John answers:

As mentioned above the lending guidelines have really tightened up recently and these types of loans are becoming extremely hard to find. Your best bet is probably going to be to contact a few FHA lenders because they can sometimes approve loans for 0-3% down that conventional lenders can not. Good luck.

Thomas asks…

What are some ways to improve your credit?

My husband has terrible credit. We have just finished paying off his past debts and are soon going to be applying for a credit card for people with bad or no credit. We will just put a little on each month and pay it off in full at the end of each month. Any other ideas? I would really like to up his credit score because we are buying another house in a couple years and my income is no longer enough to be approved for a home loan on my own. Thanks!

John answers:

There are five areas that go to make up your score, and they are weighted differently – some areas are more important than others and have a bigger effect on hurting or improving your FICO score:

1. Payment History = 35%

2. Amounts Owed = 30%

3. Length of Credit History = 15%

4. New Credit = 10%

5. Types of Credit Used = 10%

So, the 10 best things you can do for raising credit scores are:


1. Pay on time. At 35%, payment history is the largest area of concern to lenders. The only thing that will damage your score more than late payment is total non-payment.

2. Did I mention pay on time?


3. Ideally keep your debt to credit ratio to 30% or less. This means only using 30% of your available credit per card.For example, if you have a card with a credit limit of $1,000, keep the balance at $300 or less.

4. This holds true per individual card but also for your debt to credit ratio overall. This means you need to pay down debt – not just move debt around. This is a frequently misunderstood aspect of how to raise credit scores. You will save money by doing the 0% APR balance transfer dance, but you will not improve your FICO score.


5. A longer average account age will boost your score. This means that opening new accounts can lower your score because a new account will bring down the average age.

6. Point 5 above has a rider – if you have poor credit you need to re-establish your credit and rebuild your credit. This means taking a hit in the short term by applying for as much new credit as you can get so that in the long term your score will improve.


7. Don’t constantly apply for new credit. If you are shopping around for credit, try to squeeze the applications into a short time frame. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. If you are just starting out building your credit, a lot of inquiries will lower your score more than someone with a longer history.

8. Do request a copy of yor credit report regularly. Requesting a copy of your own credit report does NOT damage your credit score. This is an Internet myth. Requesting your own credit report or credit score from an authorized provider does not set off alarm bells the way that multiple requests sometimes does.


9. Mix it up. A combination of revolving credit such as credit cards and installment payments like a car loan is ideal.

10. Avoid store cards such as Target, Home Depot and so on. These count as lines of credit as opposed to revolving credit like regular credit cards. Store cards are not given much respect by credit scorers. In the long run, the convenience or in-store discounts will not make up for being refused a VISA card or a prime mortgage rate later on down the track.

The website referenced also gives away a great free ebook on 101 ways to raise your score – this is not a promotion – they do not require your email, or any credit card details or registration so the free ebook will give you some more info.

Other things you can do are pay a small fee to have things like paying your cell phone and other regular bills reported as positive credit use on your credit reports. Also get copies of your credit reprots and make sure they are correct and keep doing this regularly – use the free annual service.

James asks…

How does a USDA loan work if you have bad credit?

I have pretty bad credit right now. My wife and I are looking at a home that has been forclosed on and we would love to get it, but getting a loan the regular way is probably not going to work right now. Does anyone know exactly how the USDA loans work. Does your credit score have to be high or does it not matter?
Thank You

John answers:

My husband and I met with a lender who is licensed to work with USDA (also known as Rural Development) loans. The property has to be in a Rural Development area and you have to make less than the median income of that area. Additionally, lenders will require that you have a minimum credit score of 620 to qualify. USDA does not have a minimum guideline, but lenders do. The house will also have to meet certain criteria.

None of this is as complicated as it might sound! Believe me! We were nervous before we began the process, but our lender has been an incredible guide through the whole thing.

(It’s the underwriting process that goes on forever! LOL)

My best advice would be to got to the USDA/Rural Development website and look up lenders in your area, and then set up an appointment to meet with one. They can help you and answer all of your questions!

My husband and I are thrilled we went with a USDA/Rural Development loan because we didn’t have to put any money down and now we’re moving into a gorgeous home within a month!

You can do it too!!!

Don’t let the minimum credit score of 620 intimidate you! There might be ways around that particular problem!

If you don’t try, you’ll never know. It’s at least worth a shot! The worst thing that can happen is the lender will say no. You can always try another lender. And even if everyone says no, you’re no worse off than when you started! Go for it!!!

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