I am applying for an fha loan. I need a mid score of 580. What can I do to raise my score 55 points in 4 months? I have paid everything on time for 2yrs. I have had some incorrect items removed from my credit with the help of an agency. I have one credit card w/ a limit of 300 w/ a balance of 200. I bought a couch on credit to help raise my score. I owe 800 on it which is being paid on time. What else can I do? Please help.
2007-09-06 09:58:35 · 8 answers · asked by Diana G 3 in Business & Finance ➔ Credit
That shouldn't be a problem to get your scores up that high. FHA is not score based but FHA requires MI. A lot of private MI companies are setting score limits at 580. If you are doing a 100% loan then you will need to improve your scores. If you are putting 20% down you don't need to worry.
Also, you can do an FHA manual underwrite with explanation letters of the negative items and may not have to have your scores up.
Don't pay off your credit card entirely. Keep it around 30% of max. Financing the couch was iffy. Although it is a good trade line I'm assuming it's with a finance company. Obtaining a loan through a finance company actually hurts your score. If you are laking trade lines however it's better than nothing and will probably raise your score if it was low. If you had good credit it would hurt you. I know that sounds crazy but I heard that from a credit guru that teaches seminars all over the country.
The question with the couch is what is what is the max on it. If the max was your original balance you need to pay that down and do it now. If they gave you a 5,000 line then you are fine; keep making your regular payments.
This is a touch one to answer because if you have been clean for 2 yrs and all negative have been removed then your scores should be much higher. Something must be keeping you down. BK or something? Hope I was able to help a little.
2007-09-06 12:06:16 · answer #1 · answered by curse08 3 · 0⤊ 0⤋
From what you are saying, there is no way your score should be that low. I truly believe that you have not reviewed your actual reports to see if any derogatory items have been removed. There has to be something on the 525 and 524 credit reports that is NOT on the 575. Too much a difference.
Just because you relied upon an outside third party to assist you to "remove"items, doesn't mean they were removed. Please order your three credit bureaus from annualcreditreport.com; it's free and go over them again with a fine toothed comb BEFORE you apply for your mortgage. With scores such as yours below 600, you are going to have a VERY DIFFICULT time in the current climate in the mortgage industry to get a reasonable rate, even if you get a mortgage. You have time but you need to "get on the stick" asap!!
2007-09-07 06:23:08 · answer #2 · answered by MJ 4 · 0⤊ 0⤋
I would say the next best way is to get your debt to credit ratio down. I believe that is the next most important factor in determining your credit. So, if your limit on a credit card is 300, and your balance is close to that, you will want to pay that down. I would recommend having a balance of no more than 25-30% of the limit (for a $300 card nothing more than $75-$90).
2007-09-06 10:05:39 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Pay off the credit card completely. That will improve your debt to available credit limit ratio and should help your score.
Are these your scores after the errors were removed? If the scores are before, maybe removal of the errors will bring up your score.
Are there negatives on your report that caused such low scores? You're going to have to settle those.
2007-09-06 10:05:27 · answer #4 · answered by bdancer222 7 · 0⤊ 0⤋
That couch probably first lowered your score 7 to 25 points so not a smart move.
You need to pay both accounts off and as soon as possible even if you have to borrow the money.
The other thing to be aware of is that sometimes those "agencies" can get the item, just as you can do yourself, removed for one billing or 2 billing cycles and they pop back up. Please keep a very careful watch on your reports.
2007-09-06 11:07:41 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Pay things OFF completely! Pay off your credit card, Pay off your couch! Get another copy of each of your credit scores to ensure that all are reporting accurate information.
2007-09-06 10:37:02 · answer #6 · answered by ~*~*~*~*~*~*~*~ 6 · 0⤊ 0⤋
Get that 200 paid off and now. They take your mid score of 525 and you may not make it in time. Just depends.
2007-09-06 10:17:26 · answer #7 · answered by Anonymous · 2⤊ 0⤋
Accelerate your payment and pay it off before the due date.
2007-09-06 10:07:21 · answer #8 · answered by Skip 3 · 1⤊ 0⤋