Will Bad Debts Mess Up A Good Future?

Caleb has had some past credit troubles, and wants to know how he can improve his credit score to buy a house.

QUESTION: Caleb has had credit problems in the past, but has tried to clean them up. He wants to buy a house and wonders how he can improve his credit score.

ANSWER: Pull a copy of your credit report and make sure you have no outstanding bad debt or unpaid debt. The second thing that could cause your credit score to be bad is past debts that have been paid but are still on there.

Remember, you don’t have to have a credit history to get a house. You have to have cleaned up your bad debts, but if you find a mortgage company that does manual underwriting and can verify that you’ve paid your bills on time, then you qualify for a premium mortgage. You don’t want to spend your life building your FICO score, because it’s just an “I love debt” score.

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