RE Q&A: A potential condo buyer avoids credit cards and debt, but is financially secure. How can she convey this to an HOA board that considers credit scores?
FORT LAUDERDALE, Florida – Question: I’m having trouble getting approval to buy a condo because of my lack of credit. I don’t use a credit card and I have more than enough money to buy my new house without a mortgage. Because I have no debt, my credit score is low, and the association denies me certification. What can I do? – Pink
Responnse: Many community associations have the right to screen potential buyers. Although an association does not discriminate, it may look at income, credit scores, and other objective factors.
While being debt-free and avoiding the temptations that come with credit cards is commendable, a strong credit score helps. For example, your credit history can be used to determine how much you pay for insurance and, as you’ve discovered, whether you can buy a new home. There are reasons a credit score can indicate whether someone will pay their dues on time.
Even so, the system is far from perfect, as you know.
Your first step is to speak with the association and explain why your credit score is low. Ask them to look beyond the score for the details.
Another option is to offer to prepay a year’s membership dues to ease concerns. Since you are not a member of the association, the association does not have to deal with you, so you must ask the seller involved to lobby for your approval.
I have found that most associations will take a closer look and work with a potential buyer in situations like yours.
If that doesn’t work, you may need to look for a condo in a more flexible community. Each association has different standards, and some don’t even look at credit scores.
Another option is to establish your credit score. There are plenty of resources to guide you through building credit to boost your score quickly.
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