Buying a Home With a Credit Score of 450 - Highly Unlikely

Reader Question: Is a credit score of 450 enough to buy a house?

The real question here is, can a person get qualified for a mortgage loan with a credit score in the 450 range? The answer, unfortunately, is that it's highly unlikely. I answered some similar questions recently. One person who wrote in had a 580 credit score and the other person was asking about buying a home with a score less than 600. So those are probably worth a read.

Instead of repeating what's included in the Q&A sessions above, let me offer some advice on how to improve your credit rating as quickly as possible. It's going to be necessary before you can qualify for a home loan, so you might as well start now. Here are some of the steps you should take.

1. If you haven't done so already, get copies of your credit reports from all three of the reporting agencies. Here's some guidance on how to do that. Make sure there aren't any errors in your reports. If there are, dispute the errors with the agency that produced the report.
2. You might want to pay down some of your debt, if your debt-to-income ratio is not so great. Start by paying down those credit cards with the high interest rates.
3. It's also a good idea to close any credit accounts you haven't used in a long time, or the ones with really low balances that you can afford to pay off. However, it's usually wise to keep your oldest accounts open. Closing your old credit accounts could shorten the length of your credit history -- and that could have a negative impact on your overall score.
4. From this day forward, make sure you pay all of your bills on time. If you do have to make a late payment for some reason, try to catch up as quickly as you can. Most creditors will report the delinquency when a payment is more than 60 days past due, and that means it goes onto your credit report (and lowers your score).
5. You might want to spend some time reading through our new blog that offers free credit help to consumers. It has only been online for a couple of weeks, but it's really taking off. So you might find some helpful information there as well.
   

To summarize, there's not much chance of getting a mortgage and buying a home with a credit score of 450 -- especially in this economy, when lenders have really tightened up. So instead of pursuing that, it's probably best to focus on improving your credit score. This will help you qualify for a loan in the near future. Good luck!