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Is there anyway to qualify with credit score of 510 ZR-RHSZVBR

I was just wondering if there is any way to qualify with a low credit score or if I am just stuck trying to save up enough money to pay cash for my home. My credit score is ccurrently 510. My income is 40,000 per year and I have about 25000 saved up for my down payment. Looking for a house in the 125,000 range.
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August 22 2011 - Sunnyvale
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Answers (4)

Technically FHA goes down to 500, I've never heard of anyone getting a loan with that low of one.  We'll go down to 580 on FHA (with restrictions).  What I would do is talk to a credit counselor about getting your scores up.  I can make a referal to you for a great one and the best part is they work for free (it's a not-for-profit).  At the very least it's a great, free, starting point.  Click on me and get in contact if you'd like their contact info.
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August 22 2011
Work on building up your credit before you apply for a mortgage. 

www.myfico.com/crediteducation/improveyourscore.aspx
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August 22 2011
The answer is yes and no and maybe. 

Yes, because FHA allows a credit score as low as 500 with 10% down. You appear to have that amount available.

No, because usually the reasons for the low score still disqualify you. These can be recent late payments, charge-offs, open collections, judgments, bankruptcies or foreclosures just to name a few.

Maybe because it is possible to have a 510 score and a solid 12 months of good paying history with no active collections or other negatives on your report. To qualify, your debt ratio will have to be lower than what is usually allowed and you'll need to have a solid rental history and take a HUD approved buyer education class. (Among other qualifying criteria)

If this sounds like you, apply with a lender that has this program available. If someone tells you it's not possible, refer back to this post and this link.  
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August 22 2011
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An alternative plan would be to identify why your credit score was so low, and take the right steps to increase it.

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August 22 2011
 
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