By the end of this year, I will have all of my insallment loans paid off except for my mortgage. I have 2 credit cards that will be in good standing, low balances and all that. I want to build my credit to get the best rate I can to build a house in about 2 years. Am I going to need another installment loan on my credit report to have a good enough score? Or will the mortgage and credit cards suffice?
2006-08-16 08:06:01 · 6 answers · asked by AquaAngel 1 in Business & Finance ➔ Credit
If everything is in good standings, you should be good. It is always good to have a decent mix of loan products but it's not necessary.
2006-08-16 08:30:27 · answer #1 · answered by bella_4624_19 4 · 1⤊ 0⤋
If you are planning to build your house in 2 years, adding credit right now will help. By that time the new credit will have age showing.
Do not close your credit cards, as one poster recommended. That will only hurt you.
You should have a healthy mix of credit. Installment (which it sounds like you have a few good lines already) Major credit cards and one or two store cards. Go with prime companies.
You will take a hit on your scores right now for applying and opening new accounts, but in 6 months the inquiry's will hurt less and by 12 months they will have no adverse factors. The new accounts should start helping by 6 months and by the time you build your house, in 2 years, they should help with the history. As long as you keep them in good standing.
2006-08-16 18:23:54 · answer #2 · answered by echo 7 · 0⤊ 0⤋
The mortgage and credit cards will suffice. In fact adding new debt could lower your score.
In regards to your credit cards. It's very important not to hold a balance on each higher then 50% of the available line.
The best way to get your score higher is to charge with your credit card then pay the entire amount off each month, and continue to do this month after month. This is the fastest way to improve your credit.
2006-08-16 15:13:39 · answer #3 · answered by tangenral 2 · 0⤊ 0⤋
After you get your free credit card report from https://www.annualcreditreport.com/cra/index.jsp.
If you have any old credit card accounts (you cut up the card but didn't call or write the card company to close it), you should do that EXCEPT for the one that is OLDEST. Having an old credit line is good for your FICO score. And having few open lines of credit is good as well.
Good Luck!
2006-08-16 15:41:08 · answer #4 · answered by kcincon 3 · 0⤊ 1⤋
Start right now, pay bills on time, make a budget, stick to it. In 2 years you will be in a healthy financial situation and you will build your house.
All the best
2006-08-17 08:08:39 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Unless you have instances of defaulting or non-payment in your past, with the situation you describe, your credit should be good enough. Check your credit report for any errors.
2006-08-16 15:11:48 · answer #6 · answered by TheOnlyBeldin 7 · 0⤊ 0⤋