Financial Uncertainty, Homeownership and Your Credit Score

By Alexandra Scicchitano

     Everyone wants to eventually own their own home. It is part of the American Dream, a house and a white picket fence. A classic. But how reasonable is it to buy or even own a house since the recession of 2020?

     To even buy a house, according to NerdWallet, one needs a credit score of at least 620. But having a higher credit score means better and lower interest rates, so anyone should aim for a credit score of 740 to have the best chance with the lowest interest rates on your mortgage loans. 

     Homeownership rate in the U.S. by age is above 60% for all ages, except for people under 35, where it is at 36.5% in 2018 according to the United States Census Bureau. 

     According to Experian in their 2020 State of the Credit Report, Americans are in an average mortgage debt of $215,655. 

     69% of American consumer debt is mortgage debt. In Q4 of 2020, overall mortgage debt became greater than $10 trillion.

     According to the Mortgage Bankers Association Research Institute for Housing America, more than 6 million households failed to make their rent or mortgage in Sept. 2020, during the midst of the COVID-19 pandemic and between breaks of any financial relief from the government. 

      That was a scary time, and understandably people missed their payments on their houses. The first stimulus check was on March 27, while the second one came at about Dec. 29. It was about eight months of no financial help from the government. It’s no surprise that halfway through that financial help drought, people could not pay some of their bills. 

     Missing payments, unless allowed to by your bank, can have a huge impact on your credit score. This will make it harder for you to apply for any more loans if you’re continuously unable to pay your rent or mortgage on time. Having a worse credit score gives you less leeway with the bank you have on your mortgage and will eventually cause more problems for you and your household. 

    Your credit will take a hit if you can’t pay your mortgage monthly. Reach out to D.A.L.S. Credit Solutions & Notary to help you and your credit in case you need to miss some payments on your mortgage. Let us teach you how to manage your credit correctly during these uncertain times. 

     Take control of your credit, let us help you do that, D.A.L.S. Credit Solutions & Notary.