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How much will having bad credit affect where I can live?
Having bad credit can definitely affect where you live. It simply depends on whether you want to rent a home or buy a home.
If you are looking to buy, having bad credit can determine whether or not you are approved for a home loan. When you think about it, you are asking the bank for anywhere from $80,000 to several hundred thousand dollars or much more. While the house will stand good for itself, the bank is much more likely to give the loan to people who have the income and the credit that makes them able to afford the monthly payments and get them in on time.
If you have bad credit it may not be the end of the world, you may still be able to obtain a home loan, however it will be more likely that you will have to pay more for the privilege of doing so.
If you are approved, then it could mean higher interest rates for the term of the loan, making you pay much higher monthly payments and more in the long run. However, you must also think about the down payment.
The more money you have to put down up front, the less money you will be asking the bank for, and there is more of a chance you will get the loan. If you have bad credit but you are married, then you could have a better chance of getting a loan if your spouse or partner has good or excellent credit.
If you are looking to rent, then it will really depend on your landlord. Most landlords will take a look at your credit, but are mostly looking for any prior judgments against you that relate to unpaid rent or evictions.
There are some places that will accept your cash and a deposit without a reference check, but more than likely it will not be the greatest place to live. Most reputable landlords with nice apartments and homes to rent will do a credit check.
There may be a small percentage that would deny you completely, but most of them will just require a larger security deposit or a few months rent up front to be sure that you can afford it.
Simply put, it WILL affect your home buying or renting process, so if you don’t want the hassle of being denied the home of your dreams, then you should take care to improve and repair your credit rating as much as possible before you start looking for a new home.
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