credit question buy a house?

Question

i wanna buy a house me and my husband have one credit card together. our credit is in the low 600's right now. we have some debt that will be paid off by the end of the year. should we get another credit card to improve our rating or is our one credit card enough. by the way it has a 500 limit. i know it will take a while to improve our score to be able to buy a house--but if we can do anything else that will help let me know! thanks

Answer 1

You don't need another credit card to improve your rating. You'll improve it by paying down your existing debt and not accumulating any more until these debts are paid. If your credit card is in good status, you may consider calling the credit card issuer and ask how high a credit line they will give you without pulling your credit. They may be able to raise it for you a bit. Any help in raising your debt to credit ratio is good.

You stated you wanted to improve your credit rating. Get a current copy of your credit reports (if you don't have them) and dispute any negative information and any "hard inquiries". These are inquiries for loans and credit you have sought out. These knock 3-12 points each off your credit score, depending on the reporting agency. Getting these deleted from your report helps raise your FICO score.
It doesn't matter if you made them or not, what matters is that the credit reporting agency, by law, has to prove that you did. Dispute all negative information. For more info on this, go to a search engine, enter fair credit reporting act, and go to section 611.

Get your credit score as high as possible before buying a house. Good Luck!

Answer 2

It all depends on how much of a down payment you will have. My credit is horrible! But I'm going to have 30% to put down on a house so it doesn't matter as much. If you have less to put down you'll need a higher credit score. Shop around for credit cards and get another. Make sure it reports to more than one credit agency (Experian, Trans Union, & Eqifax). Try not to get too many inquiries. They lower your score. So know which one you want to go with before you apply. Once you get it, use he credit card for things you would normally pay cash for. Like gas, groceries etc. And then pay it off completely at the end of each month. Of course trying to pay the negative stuff off will help too! I'm in the process of buying a house at the moment and I paid a credit adviser to give me most of the same advice I just gave you!

There is also a good website to monitor it too. www.truecredit.com It charges you about $15 a month and you can cancel it at any time! I found some stuff I didn't even know I had on there and was able to resolve it before it got too bad!

On a different note: If you could possibly wait and save up at least 20% down, You'll be saving a lot more money in the long run because they will charge you some extra insurance/fees with out it. And, of course the more you put down the less your payment will be, the less your score will matter and the better the interest rate etc.!

Sorry for the long post!! Good Luck!
(If you would like the info for my credit guy let me know! He worked miracles in a short amount of time for me!)

Answer 3

Hi there, first of all all bank are different and banks use various credit scoring models. To make matters worse the models can change daily in line with risk e.g. because of the current credit crunch most banks will have raised the score requirement SO - The only solution is to get the best score you can and see a mortgage adviser to see which lender is accepting the most people with a fair interest rate - previously this would have been Northern Rock - now you might wat to consider the Abbey? OK the best score - every field on the app form is relevant I mean every field. So take time before you answer! Have you got a cheque guarantee card? Check every card and if not get one - even tho you may have snapped up your credit or store cards you still have them and they will appear on a credit search so tick the yes box and you will get more points. Another key one is the length in job/current home and bank - Just because you may have a bank that you use regularly that doesnt mean that you have been there the longest - have you an account that you opened as a child? Use that one for the form and your normal a/c to repay the DD - again more points. So I hope this proves useful - if you want me to arrange your mortgage in the future please just contact me. I am a independant mortgage adviser - AND I DONT CHARGE A FEE!!! Good luck

Answer 4

Always paying on time is the best way to start. A $500.00 credit limit is pretty low. You don't want to have too much open credit but if your income level can support more and then the house note you are looking at, yes open another or ask for an increase on the one you have. Good Luck

Answer 5

Get the second credit card. Use it occasionally but pay it in full each month -- pay both credit card in full each month. This will help build an on time payment history.

It would be a good idea to open a savings account and put a set amount in every payday for the downpayment on the house. The bigger the downpayment, the smaller the house payment.

Answer 6

Here's what I would do:

Make sure your cc debt is only 50% or less used.
Make sure you don't have too much cc debt compared to your income - it will make you a riskier customer
Make sure you have some savings
Buy credit reports directly from the CRA's once in a while, and get your best financing when your score gets to 700. You will get a loan at lower scores, but your rates will be higher.

Answer 7

You definitely want to pull your own credit report, but don't pay for it. Visit www.annualcreditreport.com for a free copy of your report from all 3 credit bureaus. And in certain states, like here in GA, we can pull our credit 2 times per year for free. Don't waste your money on those credit monitoring services, either. Just request your report and if anything looks wrong, fix it.

Answer 8

mortgage lenders look for at least 3 tradelines that have been opened for 2yrs. tradelines can include auto loans, student loans, credit cards, mortgages, etc.

FHA mortgages are easier to get with low interest rates...same thing with MyCommunity.
FHA mortgages go as low as 350 credit score with a 6.75-7% interest rate.

good luck

Answer 9

mortgage lenders look for at least 3 tradelines that have been opened for 2yrs. I found interesting information about your answer & the best options here.
http://all-mortgage-calculators.blogspot.com/2007/07/mortgage-loans.html
Good luck!

Answer 10

i dont know i just turned 22 and still live with my mom
sorry