How to buy a home in Berks County with bad credit.Once upon a time, only people with strong credit could buy a home. Yet, times have changed, and now you can buy a home with less than perfect, or even bad credit.

Still, people with poor credit shy away from thinking about buying a home in Berks County. Should having a low credit score make you just throw the idea of home ownership out the window?

Educating yourself about credit requirements and learning a few tricks to improve your score can help you realize the dream of buying a home in Berks County.

How low can your score be to get a loan?

The rule of thumb with most lenders is nothing lower than a score of 580 for an FHA loan. In some cases a score can be as low as 500, but the down payment will be higher.

How does your score affect your mortgage rate?

The rule is simple: the higher your score, the lower the rate.

If you have a low credit score, you won't be as likely to qualify for the more affordable rates. If your score is low enough, your mortgage application may be rejected. Another option is that you may need a co-signer or reduce the loan amount.

How can you raise your credit?

When you check your credit report, scrutinize it for errors. Check for collection accounts that were paid off already or debt that's not yours, as these can definitely affect your score. You can get a free copy credit of your credit report every 12 months from each credit reporting company at

Another trick to help raise your FICO score is a new service called Experian Boost. This will help raise your score if you make utility payments on time According to Experian, the average user raised their score by 13 points, which could be enough to help you get approved for a lower mortgage rate.

Should you spend some time working on your credit before you buy a home?

If you can improve your score enough in a few months enough to make a difference, then you should. Your lender can help you focus your efforts to make the most improvements.

You should also factor in just how much money you will save over time with a higher credit score. For example, the difference between a 3.5 percent rate and a 4 percent rate on a $200,000 mortgage is $56 per month. That’s a difference of $20,427 over a 30-year mortgage term.

What is the best loan for low credit scores?

An FHA loan is designed to help people with low credit scores or who don't have enough money for a large down-payment. But there's a catch. Not all lenders will approve the loan, and you will have to pay extra for mortgage insurance.

The dream of buying a home in Berks County can be yours if you have a low credit score. In the end, you have to weigh the pros and cons, along with making choices that will improve your credit. If you want to learn more about your options for buying a home in Berks County with a lower credit score, contact us today.

Visit our blog every week for more real estate articles and ways to buy a home in Berks County. We can also help you find the perfect home for sale in Reading and the surrounding communities of Blandon, Boyertown, Douglassville, Exeter Township, Fleetwood, Kutztown, and Oley with our powerful property search tool.