Increased Credit Score, Increased Opportunities

Increased Credit Score, Increased Opportunities

Posted on December 21, 2018

 

Valerie Olivarez (36) first came to Self-Help Enterprises (SHE) to ask about the first-time homebuyer program. After her partner passed away in 2016, Valerie, now a single mother of 5, was determined to buy a home and set the foundation for a better and more stable future for her family.  “It was a very difficult time that made me think about life differently,” said Valerie. “I knew I needed to do this for my kids.”

After having attended a Gateway program orientation and meeting with  Juanita Franco, a SHE Homeownership Counselor, she learned that she did not have any credit and therefore did not qualify for the first-time homebuyer program. In general, before buying a home, mortgage lenders want to know that you will not default on your mortgage. Which means that for the lender, people with poor or no credit are considered a risk and do not qualify for a loan.  A study from LendEDU has shown the Central Valley to have among the lowest of credit scores. As a point of reference, a score of 720 or more is considered excellent; between 660 and 719 is considered average or fair; between 620 and 659 is considered poor; and a score of 620 or below is considered bad. While contingent on a variety of factors, most mortgage lenders would consider lending to people with scores of 680 and above.

Valerie, like many in the region, struggled with having little to no credit. She knew she had a lot of work to do, but was determined. Valerie worked with Juanita to develop a tailored action plan to achieve her homeownership goals. Her plan consisted of opening up a credit line with her bank, paying off all of her debts and staying consistent with all of her bill payments.

“After over 2 years, I’ve recently paid off all my debt,” smiled Valerie. She recently spoke with Juanita to review her profile and learned that she had successfully increased her credit score, which means she now qualifies for the self-help housing program. She hopes to participate in the new homes project in Orosi expected to begin in the fall of 2019.

“Valerie was a pleasure to work with. Hardworking, persistent super mom is how I would describe her. In 10 months, she was able to establish credit. No matter what challenges she was faced with, she pushes right through them. She has such a great attitude and we can’t wait for her to accomplish her dream of owning a home,” said Juanita Franco, SHE Homeownership Counselor.

“I am now sharing Self-Help Enterprises’ information with my friends who also want to get started in the homebuyer process,” said Valerie. Her next steps are to attend a homeownership workshop that will help her better understand the home buying and loan closing process, learn how to maximize income and boost savings, among other important workshop objectives.

Self-Help Enterprises is a HUD certified counseling agency. Through the Gateway program, SHE offers educational and counseling services to equip potential homebuyers with the tools and resources needed to meet their financial and sustainable homeownership goals. The program helps families qualify for reduced rates or mortgage insurance with some lenders, and for USDA, CalHFA, City and County homebuyer assistance programs.

Visit our Homeownership Education page for more information about Gateway Program.