credit cards?

Question

I am trying to improve credit score to buy house.
I have one credit card with 300 dollar limit I owe 280 on it.
My current beacon score is 620.

If I pay this card down to say 50 dollars will it raise my beacon score?
If so if I paid it right now online when would it be reflected in my beacon score?

Thanks

Answer 1

Anything over 50% of your limit will bring your scores down. Paying it off entirely might be best, paying it to $50 might be better.

Many mortgage brokers have score modelling capability, where they can look and see what the impact of either option would be.

It's likely you could jump up to a 660 or better just by managing that card better.

And no, paying it today won't impact your score tomorrow. Only when the creditor reports the updated balance on their next reporting cycle would it show.

A broker can also get it updated faster, for a fee ranging from $75-100. You'd have to get a letter from your card company showing the current balance, then pay a credit reporting company to "rapid rescore" and get a quick update. Which still can take 7-14 days. Best to just pay it off and let it happen when it happens, unless you're buying a home in the next 30 days.

And after you pay off the card, don't use it again until after you close, and then never owe more than 50% of the limit.

Answer 2

If you pay today, it won't be reflected on your credit score for a good 30 days until the creditor reports your balance, and the credit bureaus update their information. Regardless, if you only have $300 credit limit credit card, there's no way you'll be able to buy a house.

You need to have multiple credit cards with large lines of credit to buy a home. A lender won't lend you $100,000+ if you've only shown you can handle $300 worth of debt. And especially if you've nearly maxed out that small amount.

Your score likely will go up, but even with a great credit score, you probably won't qualify for a home with limited credit depth and history. You need to start building your credit with multiple credit cards and raise your credit limits.


Learn more at http://www.thetruthaboutcreditcards.com
http://www.thetruthaboutmortgage.com

Answer 3

Yes, paying almost any amount in your debts will bring the score up... but not that much... Anyways... if you have a well paying job, you could get w/ that score a loan to buy a house w/ a sub-prime lender for people w/ less than perfect credit....
Ask your Realtor if he can find you a "house in which the lender is willing to give 10% seller-carry back" With that you will have to ask only for 90%LTV (Loan to Value %) instead of 100%... by doing this, the lender will probably don't care that much about your credit history...

Answer 4

It sounds like you either have a lousy credit history or you are just starting to build one. $280 isn't going to make much of a difference, since most can pull that out of their seat cushions. I think there is more to your beacon score than the credit card.