Credit Score of 500? Here, Have Some Money…

by Sean

FHA loans — you know, those loans that, when push comes to shove, we as citizens get to insure — have risen to almost a quarter of all home loans from 3% just a few years ago. Why? Because apparently they don’t care who they loan to:

FHA also has tightened lending standards, requiring a 10% down payment for those with credit scores below 500.

When 10% down payment for a credit score below 500 is an indication of tightened standards, you just have to laugh. Or cry. :roll:

Someone with a score in that range has shown an obvious lack of financial acumen, and has no business with a credit card with a $1,000 limit much less a home loan of potential $100s of thousands. Until one has shown at least the modicum of restraint — and a sub-500 credit score is just about the exact opposite — the dream of home ownership should remain precisely that: a dream.

{ 1 trackback }

repair credit
March 9, 2010 at 5:18 am

{ 14 comments }

RKI Lån September 23, 2009 at 6:34 am

This article has a very good point, but the credit score system is to blaim not the people effected by it.

mark@need bad credit loans October 5, 2009 at 2:51 pm

This is interesting. I think the credit card scores are pretty demanding. People suffer due to bad credit scores and they lack of enjoying even the basic necessities because of that.
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Whats My Credit Score October 22, 2009 at 2:27 pm

A bad credit score can affect your life in so many negative ways! I keep a pretty close eye on mine.

Tracy@medifast coupons October 27, 2009 at 9:32 am

I have to agree with your post. For those who cannot manage a credit card well enough to have a decent credit score a home loan is the last thing they need.
.-= Tracy@medifast coupons´s last blog ..Medifast updated their profile =-.

Charles@Las Vegas Real Estate November 7, 2009 at 7:23 pm

The whole credit scoring system needs to be revamped. Ever try to have false items removed from your report? It takes forever and it seems the agencies have no desire to help you.
.-= Charles@Las Vegas Real Estate´s last blog ..First Time Home Buyer Tax Credit Extended =-.

Mike Ryan December 11, 2009 at 7:39 pm

I enjoyed reading your post. I could not agree with you more. I think that it is hard to be a lender and choose between making a sale and denying loans.


Bad Credit Info

.-= Mike Ryan´s last blog ..Save, Hard To Do Or Is It? =-.

Eric@Lebanon Illinois December 19, 2009 at 9:00 pm

The credit system is probably flawed to some extent but the whole banking system/government regulatory practices are too….

Tim Lowe December 21, 2009 at 9:45 am

sometimes people need a chance to rebuild their credit score after a traumatic event. Not everyone with a low score is a complete financial dunce.

Tiara@Car loan calculator December 29, 2009 at 1:12 pm

I think this is an interesting topic to discuss and truly speaking that i really like it and i will implement some of your points. Anyways keep it up and keep continue with your valuable thoughts.
.-= Tiara@Car loan calculator´s last blog ..Car payment by the loan lenders =-.

real estate consultants January 7, 2010 at 8:07 am

nice blog , i feel beter to read your blog you get more info. visit over website

Scooter January 13, 2010 at 8:38 am

I know many guys who lost everything because of bad credit score but I think its not their problem. Your article is good and think it can save many.

Nathan@401k advisors January 13, 2010 at 1:26 pm

The entire credit system is just a way to make money off of people. I understand why it has a purpose, but they money that is made off interest they charge people is ridiculous.

Webhotel January 29, 2010 at 11:18 am

Bad credit makes rich to poor.. I know a couple of guys who now lives on our garage..poor guys..I pity them.

FHA Refinancing February 9, 2010 at 12:02 am

Its very useful info, I will keep this article in my mind.

thanks for sharing useful stuffs.

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