When the real estate market tightens up, you might ask “does credit score matter anymore?” The answer is YES! Credit score matters now more than ever.
Once you’ve been in the business for as long as we have, you start noticing patterns. The investing world goes through cycles every few years where things tighten up before flowing normally again.
However, a ‘bad market’ doesn’t necessarily mean bad news.
If you’ve prepared beforehand, you can actually take advantage of the challenging landscape to build some wealth.
What is a ‘Bad Real Estate Market’?
Essentially, what’s happening right now is banks are tightening up. This means most are lending out less money, making it harder for investors to get the money they need.
This also means that, over the next 6-9 months, people are going to be getting rid of some properties and fewer people will be buying.
If this sounds like bad news, don’t worry. If you’re ready for these market changes, it can actually be the perfect time for you to buy.
Get Your Credit Score in Line
In the past, 660-680 used to qualify you for an okay loan. Not anymore! As lenders tighten up, most will be looking for scores closer to 750-799+.
Lenders are depending more and more on credit scores. Make sure your credit score isn’t holding you back!
If you’re using personal credit cards for your investing projects (using them to buy supplies, pay vendors, etc.) stop now!
Personal credit cards aren’t made for that level of usage, and most cards will drop your credit score if you’re using too much of your balance on a regular basis.
This can lead to a significant usage issue. There are two things you can do to help fix this problem:
Once you raise your credit score, make sure you maintain it. Since lenders look so closely at your score, you should too!
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