Q: I am having trouble getting approved to buy a condo due to my lack of credit. I do not use a credit card and have more than enough money saved up to purchase my new home without a mortgage.
Because I have no debt, my credit score is low and I am being denied approval by the association.
What can I do?
A: Many community associations have the right to screen prospective buyers. While an association may not discriminate, it can look at income, credit score and other objective factors.
While it is commendable to have no debt and avoid the temptations that come with credit cards, a solid credit score is helpful.
For example, your credit history can be used to determine the price you pay for insurance and, as you have found out, whether you can purchase a new home.
There are reasons why a credit score can indicate whether someone will timely pay their association dues.
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 at the details.
Another option is offering to prepay a year of association dues to alleviate any concerns. Because you are not a member of the association, it does not have to deal with you, so you should get the seller involved to lobby for your approval.
I have found that most associations will take a deeper look and work with a prospective buyer in situations such as yours.
If this does not work, you may need to look for a condo in a more flexible community. Each association has different standards, and some do not even look at credit scores.
Another option is to build your credit score. Plenty of resources will walk you through establishing credit to raise your score quickly.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation. Send him questions online at sunsentinel.com/askpro or follow him on Twitter @GarySingerLaw.