I’m sure everyone has been denied on a credit application before. Getting that letter in the mail is usually a punch in the gut. However, the worst part of that denial letter is not the number or the list of negatives that led to their decision. The worst part is at the very bottom…the blank space. It is like a bad break-up: all your mistakes are brought up and the relationship is over. Dreams of growing old together with that glittering 60” TV are gone forever.
What the letter should say is, “Let’s try again later. Give me a call sometime.” Credit is like that, it is a relationship that never ends. It’s that friend that you don’t hear from for 20 years but calls you up when you least expect it. You may think that is a bad thing, but it is really not. A denial is not saying we are never going to work out. The truth is, you can have ugly things on your credit report that will take decades to go away and that is ok. You can have big things, small things, mistakes, ‘not my fault’ things, and still get approved.
I had a lender tell me once that your credit is like having a broken arm. When you have a broken arm, you don’t ignore it or guess that it’s broken and try to cast it with an ace bandage and a bottle of mod podge. You go to the doctor and the doctor makes it better. So if your credit needs help, talk to a lender. I understand the hesitation. It may feel like going to the hair salon after cutting your own hair with the help of a youtube video and a bottle of wine. I can guarantee you two things; one, the lender has seen worse and two, it’s not as hopeless as you think.
Another thing to keep in mind is the lender is not going to say, “pay everything off”. A little back story here: I’ve been about as broke as they come. Have pawned my belongings, taken payday loans, and sold my plasma to get by. Bought a house and lost it. Had a vehicle repossessed. IRS has levied my bank account and paycheck. Thousands from medical bills owed. (How I ever became an accountant is one of life’s greatest ironies.) I tell you this to say that like relationships, the answer is not always to try and correct the past, but to look to the future. Years ago, I went to a lender and after showing me my 442 (yes, they go that low) credit score, he didn’t say “pay off your debts”, he said, “go get a credit card”. As insane as that sounded, that little credit card allowed me to buy a house.
I had not been planning to buy. My lender friend had pulled my credit to survey the damage of my divorce. I had no money in savings and had opened a couple of lines of credit in the previous six months. The washer and dryer were completely necessary, but the treadmill I bought from the Home Shopping Network while 5 months pregnant in January…not so much. This is another thing that people don’t understand. Buying a house, getting a loan does not require years of “being good” or thousands of dollars in savings. Believe it or not, there are $0 down loans, there are grants, there are ways that only a lender knows about.
So don’t just sit and watch HGTV thinking there is no way. Talk to a lender. Get your happily ever after relationship! And as always, continue to lean on your friends here at The Real Estate by Design Group!
Submitted by Real Estate by Design