Financing A Tiny House With Bad Credit

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Financing A Tiny House With Bad CreditHave you recently typed financing a tiny house with bad credit into Google?

If so, you’re far from alone.

Hundreds of thousands of people in North America are looking to get back into financial shape by switching to a tiny house…which poses another problem:

How can you buy a tiny house if you have less than perfect credit?

Even on the low end, a fully equipped tiny house will run you a minimum of $40K.

Not exactly the kind of scratch you have sitting in your back pocket.

Does this mean you’ll have to accept life without tiny home living?

No, there is always a workaround and that’s what we’re going to cover here.

Financing A Tiny House With Bad Credit 101

First thing you should do is bookmark our step-by-step financing guide.

A few of the resources there are geared to people with higher credit ratings, but you’ll still get solid insights that apply to everyone who want to live in a tiny house.

One of the first steps in that guide is for you to get your credit report.

I used to work for a private lender focused on bad credit (avoid these guys like the plague if you can) and I learned something pretty shocking.

The shocker: a huge amount of the people applying for bad credit loans actually had decent to good credit.

So why were they applying for those kinds of loans?

Simple: The had a bad credit rating the last time they checked in on it and a year or two later, they continue to assume it’s bad.

That’s the thing with credit – if you maintain healthy repayment habits, your credit repairs itself.

First thing’s first: visit FICO and see where you stand.

If your credit rating has improved, you might just have to wait another six months or so and your rating will reach a level that will open new borrowing opportunities for you.

Kill Your Debts

Financing A Tiny Home With Bad Credit

I know, I know…

You’ve heard that one before and you’re fed up with hearing it.

But the fact of the matter is that it’s true.

When you apply for a loan or credit, lenders really don’t like seeing any outstanding debt.

Did you know that your credit rating is affected when more than 30% of your credit card balance is used?


Most people associate bad credit with NOT repaying your debts, when in a lot of cases, a low rating can be attributed to “dangling debt”.

That’s why when someone with a great credit gets a mortgage or car loan their rating automatically drops from great to good – all because they have a large loan that will take a while to repay.

How Much Can You Save?

We personally (and we’re not financial advisors, BTW) believe that you should always stash away some cash while repaying debt.

After all, a lack of liquid cash is the most common reason people find themselves in a credit pinch.

Once you’ve determined how much money you can put towards your tiny house fund, you should focus on the 80/20 rule.

80% of the cash you can spare should go towards debt and the balance goes into your savings account.

Where do you find that extra cash?

That really is up to you.

Here are some off the cuts we made to save cash:

Restaurants or bars – only ONE visit per month ($420 per month)*

No more coffee from cafes ($98 per month)

Lease books from the library ($100 per month)

It’s changes like those that really add up when you put them all together.

Also, for one off purchases that cost more (winter books, an air fryer), get in the habit of checking out Craigslist to see if you can get it lower than retail.

We’ve saved tons by doing this instead of automatically buying at retail.

*BTW, it’s worth noting that since cutting out restaurants, not only have our finances improved, but so has our health.

Need Help Managing Your Debt?

Like we mentioned above, we’re not accredit financial advisors.

Could be that you’re carrying a level of debt that you feel overwhelmed with.

If that is the case, you might want to consider a debt relief service.

Sometimes the best way to beat debt is to have everything broken down into small, easily digestible pieces.

These relief services can help you put together a roadmap that will clearly establish a finish line for you so that you’ll know exactly WHAT to expect and WHEN to expect it.

Financing A Tiny House With Bad Credit – Hustle Edition

bad credit tiny house

OK, so let’s say you want the tiny house now, not later.

We get it.

You can do it, but it’ll take hustle.

And you’ll have to make some concessions.

The first concession you’ll have to make: you’ll need to live in a tiny house on wheels, whether you like it or not.

If you can scrounge up $3K, that is enough to buy a used school bus. Once you refurbish that bus, you have a  rent/mortgage-free abode.

Second, you’ll have to lease some land.

“Wait, isn’t that rent?”

Well, yes but you can lease land for as little as $300 to $400 a year.

That would give you all the money you need to kill your debt and save up for the tiny house of your dreams.

This is the fastest and easiest way to get a tiny house with bad credit.

So you see…there are solutions, so long as you’re willing to make (short-term) compromises.