Everything You Need to Know About Credit Scores and Real Estate

A solid credit score is one of the strongest assets that a real estate investor can have. This metric makes it easier for an investor to obtain a better rate on loan, get a mortgage, and more.

real estate agent offering a pen to a client to sign on investment property


In this article, you’ll learn about your credit score and everything you need to know from an expert real estate agent's perspective, including guidance and advice.

What Is A Good Credit Score?

Since having a good credit score can save you money and give you better financing opportunities, it's integral to find out where your score currently lies.

For this article, we’ll use the popular scoring model, FICO.

According to this scale, a score of 300-650 means you have bad or poor credit. 650-670 is fair credit, and 700+ is good to excellent credit.

a woman holding a credit card while making purchases


It's important to note that there are other scoring models outside of FICO, so it's important that you access your credit report to find out your individual details.

What If You Have A Bad Credit Score?

You can always improve your credit score using various methods. Firstly, when you have access to your credit report, thoroughly go through it for mistakes. Mistakes that negatively impact your credit score aren’t uncommon and when you find them, quickly contact the bureaus to have the issues fixed.

Moving forward, make sure to pay your credit accounts in a timely manner to maintain good standing.

Utilizing a lower percentage of your total credit is also a good hack to improve your score because it shows that you're responsible and not over-extending your credit cards.

Another tip to improve your credit score is to wipe out any unpaid fees that have gone to collections.

How Can You Invest In Real Estate With A Bad Credit Score?

Yes, you absolutely can. The trick here is to find financing options that do work with you regardless of your having a poor credit score.

You can consult individuals or businesses that provide loans. These are generally independent of your credit score, but keep in mind that interest rates on these loans are generally higher, averaging around 16%.

Another lucrative option is wholesaling, which allows you to acquire properties at a much lower value, running its operations using a wholesale agreement, and then find a buyer willing to purchase your contract.

This works amazingly for those with bad credit because, in most cases, a credit check isn't performed.

Investing in real estate isn't just a pipe dream - it's possible for everyone. You just need to be innovative.

Work With Phillip Fehler to Invest In Your Dream Property Today

Phillip Fehler has spent more than two decades buying and selling residential properties in Fayetteville, NC, and providing military housing services in Fort Bragg, NC. He’s among the top residential real estate agents in North Carolina.

His client testimonials are absolutely spot on. You can browse through the available listings on his website. To learn more about your investment options and invest in real estate, contact him now.

 

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