Hi guys, I am at the point now where I'm tired of living in an apartment and I'm now ready to start looking for a house. The only problem I have is, I need to raise my credit score. What tips can you guys give to help improve my credit score? There's really only two things on my credit that are making me look really bad right now and they have balances just under $2,000.00 each. Those are Foley's and American Express. I called Foley's to talk about a settlement offer and they only settle for 85% of the balance. I might as well pay the entire balance if that's the case. So guys, any advice you can give I would really appreciate.
whats your limit on each (if you are over 75% of your credit limit, then this would probably keep your score down)? its hard to find quic fixes to raise your score, other than paying off your balances credit history (specifically, payment history), debt/balance rations, and # of open accounts will all affect your scores as far as buying a house, you can get a mortgage, even with below average credit ...most lenders look at a 45% debt to income ratio, that is, with the mortgage, they wouldn't want your monthly credit payments to exceed 45% of your monthly income
You have to remember that homes typically appreciate in value overtime, so, even if you do default, they still make their money. In otherwords, they aren't typically as strigent on credit scores as a auto lender would be.
No I agree with this statement. He asked about improving his credit score, surely defaulting to the point of having to offer to settle for less than the full amount would be a disaster. You can't save a bit more to pay off those credit cards first?
Try going to a lender to see if you could get pre-approved on a home loan. See how much they give you. If you get approved for $130K, look for a house that costs around $110K. Ask the lender for second mortgage loan for around 10k for home improvements. Take that 10K and pay off your debts. Use the rest for buying stuff for new home.
You should not settle for less then 100%, it looks very bad on your credit. My wife is a realtor with Keller Williams and works with a morgage lender who can help you out. He can talk a look at your credit and let you know how bad it really is and how much higher you need to raise it in order to qualify for a mortgage loan. You might be closer then you think. You can e-mail her at angelabrown@kw.com or e-mail me through the board & I will give you her phoone number.
well if you can settle for less more power to you.. but they dont have to do anything. If you are serious about purchasing a home a realtor or mortgage broker are good places to start. They can pre-qualify you. good luck.. if you are looking for basic tips to improve your credit check out yahoo finance (Suze Orman) is great but they have alot of financial advisors. but if you have alot of debt you may want to focus on paying that down first as it might be tough for you to handle a mortgage if you are having trouble staying on top of other debt (credit cards, etc) J
Agreed. Should pay off those cards in full (or close to it) before thinking about a home purchase. That is the best short-term move to improve your credit. Most other moves are intermediate to long term. You might try opening 1 more account (have 3-5 credit accounts in total including cars and credit cards), but do not charge anything to it unless your can favorable transfer your balances (no interest in 6 months while you pay it off). If you don't have the money to pay off those accounts, but could borrow it from a relative that would be an option (get is transferred 3+ months before you plan to get your financing in order because they will ask for bank statements and question where the money came from). If you don't have the money for those bills (to pay in full or close) and can't borrow it from a relative/friend where it won't be show up on recent bank statements, I think you need to work on these before trying to buy. Again, you might open 1 more new account with favorable introductory rates for moved balances on your other accounts but don't charge anything new on the new account until your get it to zero balance 1st. After that you can use it but should pay it off each month (there are lots of good programs to get cash back or frequent flyer miles or 5% off on gas or 1.5% into an IRA if you pay off the balance in full each month--it is free benefits for the taking).
Stuff like this amazes me. Only in America can someone spend more than they can afford and wonder why they should pay back their debt.
damn - i am glad i've never had to do any kind of business with you. i'd be absolutely pissed if i lent you 100 bucks - then i tell you that you only need to pay me 85 in return and you feel jipped. pay off your damn debt you cheap sunnovabitch.
I've been going through a re-finance and I found out that debt to income ratio is a biggie. My credit rating was considered "fair" thanks to mainly one Best Buy card (assholes!), but because my debt to income ratio is really good, it has helped a lot.
Hey jeff, Check out www.elendmortgage.com. My friend got financed through them, and they helped him raise his credit score through some outside sourcing they used. Anyhow, I believe he contacted Derek@elendmortgage.com
I don't know the situation here, but with a lot of credit cards it isn't what you owe, it is jacked up penalties, and interest rates that were raised on customers without warning, etc. If it was just what he owed that would be different. As far as advice I will try to help the best I can. I got in some debt problems after I came down with a chronic disease that needs consistent treatment. Despite working working 2-3 jobs I didn't have insurance for the period of about one year. I racked up a huge credit card debt, and a lot of medical bills in addition. I then spent a long time paying them off. I have no credit card debt now, and just a few medical bills left. I made a settlement deal with the credit card companies. Since then I have bought two cars in order to help repair my card score. I could have paid for them both in cash, but made sure that I took 2 years in order to do it in order to repair my score. I am also in the market for buying a home. So I know how the credit scores will affect the interest rate of the loan, and the type of loan you will get. I would see what is possible as far as loans go now. Talk to whatever you can and take the advice you get on this board. If you still can't get the loan you want, then adjust the way you look at preparing to buy a house. Look at it in steps. Step 1 in buying a house would be to pay down the credit debts you owe. Step 2 is to use this time to buy something that takes at least one year to pay off, and don't be late on any of the payments. Step 3 is start looking for loans again. You will get your house, but it may just take a little longer than you thought.
