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
Carolyn Ross
Carolyn Ross spent her career in the advertising world as a commercial photographer. She is no stranger to meeting challenging deadlines and working with many people in a fast paced environment.
She has shot for various magazines such as Architectural Digest, Boston Globe Magazine, Wellesley Weston, South Shore life as well Boston Magazine to name a few. Her love of homes and visual spaces has evolved through the years and has lead her to expand her career. She currently serves on the board of a national organization: The American Society of Media Photographers for the New England chapter. She has been involved in the school art programs as well as teaching photography classes.
Carolyn's expert knowledge of staging and art direction is what differentiates her from other agents. She has also taken her keen business background and artistic talents to successfully renovate numerous investment properties in the Metrowest area over the last several years.
This is what inspires her and with determination and passion, she will bring these unique skills to your next real estate transaction.
