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Credit Problems can seem like an insurmountable barrier to getting a home loan. Ita��s not an easy task, but with patience and some insight you can turn things around. Here are four ways you can get on the road to credit repair a�� and put yourself in a better position for homeownership.

1. Develop a budget
Stop all credit transactions right now. It might sound harsh, but you should hide or destroy all of your cards if necessary! Now you can manage your inflow of cash and, more importantly, your outflow a�� money in and money out.
Develop a flexible budget. Consider all necessary expenses such as housing, food, and healthcare. Then, eliminate expenses that can be trimmed such as entertainment and dining out. For more help, contact a nonprofit credit counseling agency, such as the TCA at 866/528-0588 or .

2. Contact your creditors
If you arena��t making timely payments, dona��t wait for your account to be turned over to collections. Your creditors may be able to help you get on a lower-interest payment plan or agree to a settlement.
A helpful tip: If your balance is unmanageable, offer a 30% settlement payment first. Some creditors will take payments of 30-40% off rather than have you default. Make sure to get the agreement in writing. Once youa��ve paid in full, send the settlement letter to each of the credit bureaus (Equifax, Trans Union, and Experian/TRW) for reference so they will update your credit report.

3. Consolidate your debt
Another approach to consider is acquiring a debt consolidation loan. This type of loan will allow you to pay off your outstanding balances with one, lower-interest monthly payment. A home equity loan for debt consolidation could allow the interest you pay to become tax-deductable.

4. Avoid Bankruptcy
A last resort is bankruptcy because of tis long-lasting effects. Bankruptcy can make it difficult to attain future credit, life insurance, and sometimes even a job. It does, however, offer a new start. The primary types of personal bankruptcy are Chapter 13 and Chapter 7. Chapter 13 allows you to keep property that you would otherwise lose, but payoff a default amount during a three to five year period. Chapter 7 (straight bankruptcy) liquidates all of your assets that are not exempt. Property is turned over to creditors or sold by a court-appointed official.

Help for Homeownership is out there…

There are lots of programs to help first-time and low-income homeowners, and even those with spotty credit histories who want to realize the American dream of homeownership. One is the Texas First Time Homebuyer Program. For more information, visit or call me today at 832.628.7355.

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