Whether you’re selling your house because its a “sellers market” or because you’re facing financial hardship and want to avoid foreclosure, we have some good news for you. You don’t need a good credit score to sell your house. Your credit score only matters when you’re trying to take a loan (mortgage) to buy a new house as the lender wants to know you’ll be able to make monthly payments. Nobody looks at your credit score when you’re selling your house. And selling your house gives you an opportunity to increase your credit score.
But first, don’t just sell your house because you need money right now. You have to prepare yourself for what happens after you’ve sold your home. And more important, have a plan so you don’t wind up in a worse situation.
Your credit score isn’t going to increase just because you’re no longer making or missing mortgage payments. And once you sell, you will not have a home after the move out date, so you’ll need to find somewhere to rent, or have a plan to move in with someone before you sign the dotted line. But don’t be scared, this is still an opportunity for you, if it makes sense for your situation.
If you sell your house for cash to a company like ours, you can use that cash to pay down some of your bills, for the deposit on an apartment, and also for rent. If you are going to rent, check to see if your new landlord sends payment information to the credit bureaus. If they do, and you pay on time, the record of the payments can help to increase your credit score over time. Your credit score will start to climb because the credit bureaus have a record that you’re reducing your debts and making on time payments.
The next thing to think about is how to avoid winding up in the same situation. Talk to a financial advisor and see how you can get your financial health back. They’ll be able to assess your situation, and determine your next steps so you can have a fresh start. They’ll even walk you through ways to increase your credit score and use the money you make selling your house. And if you are not in a rush to sell your house, talk to them before talking to home buyers. Having this extra time could let you increase your credit score so that after you sell your house, you can get a mortgage or find a place to rent more easily.
If your situation is dire, and you need to sell your house fast to avoid losing everything, don’t panic. Again, your credit score doesn’t matter when selling your house, or when avoiding foreclosure. There are a few options to help prevent you from losing everything. You can try a short sale, or contact a home buyer like us and sell quickly. But short sales are tricky.
Your lender, normally a bank, has to approve the short sale. It isn’t up to you since your lender owns the house you want to sell. The benefit to a short sale is your credit score is not impacted like it is with a foreclosure. The downside is you walk away with nothing. That’s why selling to a home buyer is better. When you sell to a real estate investor, you have cash in your pocket and just like a short sale, the buyer pays off what is owed on the mortgage.
Your credit score does not get worse when you sell to an investor, and you have cash on hand. You can also sell quickly, sometimes in as little as a few business days. But not all home buyers are equal. Make sure the one you are talking to has your best interest in mind.
Ask them:
- What is the required move out date? Some will let you choose.
- Can I get a cash advance? Legit ones will say yes, once you’ve signed the dotted line.
- Will you haul away things I leave behind? Make sure you’re not charged a fee for this
You can sell your house if you have bad credit, and it will not impact your house. Your credit score only impacts you when you’re buying a home, and if you need to take a mortgage. And now you’re ready to evaluate your options and ask the right questions to the buyer to make a decision where you’re better off. If you decide selling your house for cash is the best option, give us a call at or fill out the forms on this page and talk to one of our home buying specialists.