Four Ways to Fix Bad Credit
Credit problems can seem like an insurmountable barrier to getting a home loan.It’s not an easy task, but with patience and some insight you canturn things around. Here are four ways you can get on the road to creditrepair—and put yourself in a better position for homeownership.

1. Develop a budget
Stop all credit transactions right now. It might sound harsh, but you should hide or destroy all of your cards if necessary! Now you can manage your inflow of cashand, more importantly, your outflow—money in and money out.

Develop a flexible budget. Consider all necessary expenses such as housing, food, and healthcare. Then, eliminate expenses that can be trimmed such as entertainment and dining out. For more help, contact a nonprofit credit counseling agency, such as the TCA at 866/528-0588 or takechargeamerica.org.

2. Contact your creditors
If you aren’t making timely payments, don’t wait for your account to be turned over to collectors. Your creditors may be able to help you get on a lower-interestpayment plan or agree to a settlement.

A helpful tip: If your balance is unmanageable, offer a 30% settlement paymentfirst. Some creditors will take payments of 30%-40% rather than have you default. Make sure to get the agreement in writing. Once you’ve paid in full, send the settlement letter to each of the credit bureaus (Equifax, Trans Union, and Experian/TRW) for reference so they will update your credit report.

3. Consolidate your debt
Another approach to consider is acquiring a debt consolidation loan. This type of loan will allow you to pay off your outstanding balances with one, lower-interest monthly payment. A home equity loan for debt consolidation could allow the interest you pay to become tax-deductible.

4. Avoid bankruptcy if you can
A last resort is bankruptcy because of its long-lasting effects. Bankruptcy can make it difficult to attain future credit, life insurance, and sometimes even a job.It does, however, offer a new start. The primary types of personal bankruptcyare Chapter 13 and Chapter 7. Chapter 13 allows you to keep property that you would otherwise lose, but pay off a default amount during a three-to five-year period. Chapter 7 (straight bankruptcy) liquidates all of your assets that are not exempt. Property is turned over to creditors or sold by a court-appointed official.

Help for homeownership is out there.  There are lots of programs to help first-time and low-income homeowners, and even those with spotty credit histories who want to realize the American dreamof home ownership. One is the Texas First Time Home-buyer Program. For more information, visit MyFirstTexasHome.org or Contact me today!

Elizabeth Epperson, REALTOR® 
EXIT IH 10 Realty
9973 IH 10 West
San Antonio, Texas 78230
(210) 410-5781
(210) 694-2510 Fax