Increasing a credit score enough to buy a house.?

Question

What is the average time it takes for a persons score to increase if they are paying all their bills on time and paying down installment loans and credit cards. How much should it increase in say 7 months. We are trying to get ready to buy a house and hoping to get everything in order in the next few months. We filed bankruptcy (ch 7) 4 years ago. Right now my credit score is 614.

Answer 1

For buying a house Credit History is much more important than credit score. Often, the lack of credit history is equated with bad credit. You should be aware that lenders will go through your credit report once you apply for loan for buying a house. Therefore you should polish your credit report. Anyway, in order to establish a good credit history and at the same time risen your credit score in a short time do following things:

1) Close all of your credit cards but one. It reflects in your credit report and it is a very good sign. For instance say that you have 5 credit cards with $1000 credit limit for each. Therefore you are responsible for $5000 of possible debt. But when you close 4 of them, now you are only responsible for $1000 of debt which lowers the level of risk of lending money to you.

2) If you have any loan, like car loan or any balance on your credit cards, try to pay more than your monthly payment for 6 months or something. I mean say your monthly due on your car loan is $150, try to pay $250 each month. Lenders can see these trends in your credit report and they see that you’re a responsible borrower.
If you don’t have such loans, I suggest getting a $3000-$4000 loan and paying it off in full in 5-6 months. You might pay $200-$300 of interest but you will save thousands of dollars in your home mortgage and interest rates.

Answer 2

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RE Increasing a credit score enough to buy a house.?

What is the average time it takes for a persons score to increase if they are paying all their bills on time and paying down installment loans and credit cards. How much should it increase in say 7 months. We are trying to get ready to buy a house and hoping to get everything in order in the next few months. We filed bankruptcy (ch 7) 4 years ago. Right now my credit score is 614.

Answer 3

As long as you stay on top of your bill you'll stay within the range you have now in the short term, in the long term (2 or more years it will increase your score substantially) The only real way to build your credit score is to have a higher amount of credit vs debt available to you.

I've got 10 steps you can use to build your credit score. I raised mine to well over 700 points from 500 using these steps:

# Know and Track Your Credit Score
# Never Miss a Payment, Starting Today
# Never use more than 20% of your Available Credit
# Keep Credit Cards that Have No Annual Fees Open For as Long as Possible
# Extend Your Credit Limit on Cards You Already Have before You Get New Ones
# Get Credit Cards that Have CashBack Rewards to Contribute to your Balance
# Transfer Your Balance to a Credit Card with a Lower Interest Rate and a Higher Available Credit-
# If You Think You Are Going to be FORCED to Pay a Bill Late Ask for an Extension or Payment Plan
# Take out a Small Personal Loan and Repay it Over a Year
# Ask Someone With Good Credit if They will Account Shadow you

Read the full article here, it gives you an overview of credit scores, and the 10 steps in detail on page 2:
http://millionster.com/articles/debt/increase-fico-credit-score/

Answer 4

Chapter 7 is what is hurting you. It could take another 3 years before your credit score gets cranking again..

BUT, 614 is not all that bad and can ussualy qualify for most types of mortgage loans. You may be paying slightly higher rates, but there are always banks that are going to qualify scores over 600.

I have a friend who was qualifed at Wachovia for a morgage and his credit score was around 605. He as the only person on the loan also. Each bank is going to be different, and the rates you pay are going to be differant. But like the other person said, ussualy you qualify for the best loans when your score gets over 700.

Answer 5

For a large purchase such as a house you should be in the mid to high 600s to get a reasonable interest rate. The best way to raise your credit rating is to get a credit card (it doesn't matter what the limit is) charge some stuff this month make the minimal payment next month and pay it off the month after that. That raises your score quick because it shows up as dept paid in full. It is as if you took out a loan and paid it off because the report doesn't show a dollar amount. But as for buying a house I would try to get your score up to high 6's low 7's. Just be carefull there are alot of lenders who will set you up with a loan that's not the best deal for you with a floating rate. Be care full and good luck with your house

Answer 6

2 years

Answer 7

Just a note after reading some other posts...

Don't EVER close a credit card account (unless there is an annual fee). This will LOWER your score. Closing a credit card account reduces your available credit, which raises the amount of debt you have in relation to your available credit. This will SEVERELY LOWER YOUR SCORE!!

Closing the account will not help you. If the credit card company closes it due to inactivity, that's fine, because they won't do that right away. Just be safe with the card. Destroy it, or put it in a safe deposit box.

Answer 8

You can obtain a loan with a lower score but 720 seems to be the magic number when trying to secure the best rate. Pay down your CC bills / loans first, as you want your revolving credit to be as low as possible. I think a few months is a bit hasty but best of luck.

Answer 9

A good credit score is over 700. Over 730 is considered excellent. Ideally, this is where you want to be. Paying your bills on time is good, but paying them in full will boost your credit score. Credit card companies don't like this as much as banks do. the cycle of debt can be viscious. My advice: If you can't afford it you don't need it.

Answer 10

If you use a professional credit restoration company they can remove the bk and other negative information quickly and your score will jump up. Do your due dilligence, though, as there are only three legitimate credit restoration companies in the United States.

If you have any questions regarding your credit issues you may email me at [e-mail]