A good credit score is a basic requirement for traditional home loans, but can you get home improvement loans with bad credit? Home improvement loans meant specifically for remodeling, renovating or repairing your home have similar financial requirements, but can offer a bit more flexibility. Here are the important things to know:
What credit score is needed for a traditional home improvement loan?
Lenders generally require a minimum credit score of 660-700 to qualify for a home improvement loan. While some approve lower scores, the trade-off is usually a much higher interest rate on the loan.
Can I get a renovation loan with bad credit?
The Federal Housing Administration (FHA) offers loans for borrowers with lower credit scores. If you need financing with lower credit, both the FHA 203(k) renovation loan and FHA Title I loan programs are worth investigating.
How can I borrow against my house with bad credit?
To borrow against your house, you need to take out a home equity loan or a home equity line of credit (HELOC). These options use your home as collateral, and allow you to borrow money against the total value. Home equity loans are better for large, one-time projects, while a HELOC is more helpful for funding smaller ongoing projects.
How to build up your credit to get a home improvement loan?
The best ways to build and increase your credit score are to:
- Enable automatic bill pay to guarantee on-time payments.
- Avoid "hard checks" on requests for new credit cards or loans.
- Improve your debt to income ratio.
Unfortunately, improving your credit score won't happen overnight. If you're in need of a time-sensitive renovation, consider these options for obtaining financing - regardless of your credit history.
About the Author
Raena Everett
Raena has an exceptionally positive outlook on life. She believes every day presents a new and exciting adventure. She also applies this attitude towards her work. She was raised in Bangor, Maine until she moved to Venice in 2011. She graduated from the University of Maine at Orono with a bachelors degree in public management. She has been an entrepreneur her entire life, owning several small businesses in Maine. She contributes her success to her problem solving skills and her commitment to excellent customer service. These skills will easily carry over to her real estate career. Her market knowledge and customer service will provide great service to her real estate clients.
She is currently a Realtor(R) for Coldwell Banker Residential Real Estate in the Venice office.
